FTC and eight states sue Toast over hidden fees, hard-to-cancel contracts and 24/7 support claims

The Federal Trade Commission and eight states sued Toast on 29 October in the US District Court for the Northern District of California, alleging violations of the FTC Act, the Restore Online Shoppers' Confidence Act and state laws. The Commission voted 2-0 to authorise the complaint.

The complaint says Toast charged early termination fees of $150 for each remaining month of a contract, including $5,318.87 to one customer after four years, and $85 a month for payment processing during temporary closures. It alleges a $0.99 fee on some online orders above $10, from September 2021 to July 2023, went to Toast and not to restaurants, and that Toast Capital loans are treated as in default when a customer cancels.

It also challenges the "24/7/365" support claim. FTC consumer protection director Christopher Mufarrige said the practices are illegal. Toast says it disagrees and will defend itself.