The Federal Trade Commission and eight states have filed a lawsuit against Toast Inc., a software provider to small restaurants, alleging the company imposed hidden and unauthorised fees, unwanted add-ons and made it difficult for customers to cancel services. The complaint claims Toast violated the FTC Act, the Restore Online Shoppers’ Confidence Act and several state laws. Toast customers reported being charged for add-ons like payroll processing without consent and faced early termination fees that could exceed $5,000. The complaint also cites a $0.99 fee charged to some restaurant patrons without proper disclosure.
Toast is accused of failing to provide the promised “24/7/365” customer support, with some restaurants waiting months for issue resolution, sometimes losing card payment revenue. The FTC’s Bureau of Consumer Protection director said these practices drained profits from small businesses and were illegal. Toast disputes the allegations, arguing that the Restore Online Shoppers’ Confidence Act does not apply to its business-to-business contracts and that it has cooperated with the FTC since mid-2025.
The lawsuit raises questions about how far consumer protection rules extend to B2B software and payment providers. Regulated firms in finance, insurance and healthcare should examine their own contract terms, customer support and transparency around fees. The outcome may influence future regulatory scrutiny of commercial software agreements.
