The FTC and eight states, including Florida, sued Toast over hidden fees and hard-to-cancel contracts

On Thursday, October 29, 2026, the Federal Trade Commission and a group of state and local governments sued Toast Inc. in the US District Court for the Northern District of California. The complaint alleges that the restaurant point-of-sale and payments company charged restaurants hidden and unauthorized fees, enrolled them in add-ons they did not ask for, failed to deliver the support it advertised, and made its subscriptions hard to cancel. Toast says it disagrees and will fight the case.

Who is suing

The FTC was joined by the people of California, through the Los Angeles County Counsel and the San Francisco City Attorney, and by the attorneys general of Florida, Colorado, Illinois, Iowa, Nebraska, Oklahoma and Utah. The complaint says "at least tens of thousands of consumers" have complained about these issues to the FTC, online or directly to Toast. It alleges violations of the FTC Act, the Restore Online Shoppers' Confidence Act (ROSCA) and the states' consumer protection laws.

What the complaint alleges

These are allegations, not findings. No court has ruled on them.

• Subscriptions and add-ons. Restaurants must enroll in auto-renewing subscriptions that average about $900 a month, depending on the number of terminals and the add-ons bundled in, such as timekeeping, payroll and payroll tax filing. The complaint says customers frequently report being enrolled in, and charged for, add-ons without their consent.
• "$0" pricing. Toast's Pay-as-you-Go plan advertises $0 hardware and software in exchange for higher per-transaction processing fees. The complaint says the plan carries fees that are not clearly disclosed. One example it gives: a customer that does not start processing within 120 days of buying a subscription must return all the hardware or pay its full retail value. "In fact, none of Toast's hardware is $0," the complaint says.
• Cancelling. The plaintiffs describe a multi-step process that requires written notice, contact with several Toast teams and, in some cases, sales pitches. Some customers who did cancel were hit with early termination fees or kept being charged. One customer was charged a $5,318.87 early termination fee after cancelling an account he had held for four years.
• Toast Capital loans. If a customer with a Toast Capital balance cancels or switches providers, the complaint says Toast treats it as a default and demands the full outstanding balance at once, which leaves owners choosing between unwanted subscription charges and an accelerated loan.
• A fee charged to diners. From September 2021 to late July 2023, Toast added a $0.99 fee to certain online orders over $10 placed through its platform. The plaintiffs say the fee went to Toast, not the restaurant, on top of what restaurants already paid, and that Toast's wording obscured who kept it.
• Support. Toast advertises "24/7/365" support in each subscription package. The complaint cites owners who could not reach anyone who could help, including one who was told on a Saturday that the team he needed was unavailable, which he says cost him thousands of dollars in card sales.

What Toast says

In a statement quoted by Payments Dive, Toast said it disagrees with the allegations "and will vigorously defend" itself. It said it has cooperated with the FTC's review since mid-2025, tried to reach a resolution short of litigation, and that the FTC "disregarded the information we provided showing the extent to which our restaurant customers negotiate their contracts." Toast also said no court has found that ROSCA applies to negotiated business-to-business agreements and that it does not believe it applies here.

What to check in any POS and payments contract

The allegations are about Toast, but the questions apply to every bundled POS and processing agreement. Pull your contract and your last three statements and look for:

• Term and renewal. When does the term end, and does it renew automatically? How much notice do you have to give, and in what form?
• Early termination. Is the fee a flat amount, or a formula such as the remaining months of software fees? Work out what it would be today.
• Add-ons. Compare every monthly line on your bill with what you actually use and remember agreeing to.
• Hardware. Do you own the terminals, lease them, or have to return them? What happens if you leave?
• Financing. If you took a merchant cash advance or loan from your provider, read the clause on what happens to the balance if you switch.
• Rate changes. Can the provider raise your processing rate by notice during the term? Our record of 2026 mid-contract rate increases shows how common that is.

The Florida Attorney General is one of the plaintiffs, so this case is close to home for restaurants in Tampa Bay, Miami, Fort Lauderdale, Naples, Fort Myers and Cape Coral and West Palm Beach. The suit is a US case. In Toronto and the rest of Canada, the Code of Conduct for the Payment Card Industry gives merchants specific notice and exit rights when card fees go up; see the Code of Conduct rights most merchants never use. For how we price, see our Lavu POS with Adyen and cash discount program pages.