FTC and States Sue Toast Inc. Over Hidden Fees and Cancellation

The Federal Trade Commission and eight state co-plaintiffs filed a lawsuit against Toast Inc. on October 29, 2026, alleging hidden fees, unauthorized charges and a difficult subscription cancellation process. The complaint was filed in the U.S. District Court for the Northern District of California. Every claim in the case is an allegation that the court has not yet decided.

At a glance

• The Federal Trade Commission, the People of the State of California and the Attorneys General of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah filed the lawsuit on October 29, 2026.
• The complaint alleges Toast failed to clearly disclose fees, including an $85 monthly charge for restaurants that close temporarily and a $150 per month early termination fee.
• The complaint alleges Toast charged restaurant patrons a $0.99 fee on certain online orders above $10 from September 2021 through late July 2023.
• The complaint alleges Toast’s “24/7/365” customer support claims did not match the support customers actually received.
• The Commission vote authorizing the staff to file the complaint was 2-0.

What the FTC and states allege against Toast Inc.

Toast Inc. markets and sells point-of-sale hardware and software and payment processing services to small businesses in the restaurant industry, according to the FTC release. The company sells its software as an annual or biennial subscription, billed monthly, and also offers financing products called Toast Capital loans to existing customers.

The complaint alleges that restaurants must enroll in auto-renewing subscriptions to obtain Toast products, with costs that vary by the number of terminals and bundled add-on services. Examples of add-ons listed in the complaint include employee timekeeping, payroll processing and filing of payroll taxes. The FTC and state co-plaintiffs allege Toast customers frequently complain about being enrolled in and charged for add-ons without their consent.

The complaint also targets a “Pay-as-you-Go” plan that Toast advertises, under which customers pay higher per-transaction fees and receive hardware and software for $0 per month. The plaintiffs allege Toast imposes fees on hardware and software costs without clearly disclosing them. The complaint cites three examples: customers who do not start processing payments within 120 days of purchase must return all hardware or pay its full retail value; restaurants that close temporarily still owe $85 a month for payment processing; and customers who cancel must pay an undisclosed early termination fee of $150 per month for each remaining month of the contract.

Separately, the complaint alleges Toast charged restaurant patrons a $0.99 fee without adequate disclosure or consent from the patrons or the restaurants. According to the complaint, Toast added the fee to certain online orders above $10 placed through its platform from September 2021 through late July 2023, and the fee went to Toast rather than to the restaurants.

What the complaint says about cancellation and “24/7/365” support

The complaint alleges Toast did not provide a simple cancellation process. Instead, the plaintiffs allege, Toast used a multi-step process requiring coordination among multiple internal teams, which left many customers with months or years of unwanted charges. According to the complaint, customers must first give 30 days’ written notice of their “intent not to renew,” a requirement not clearly disclosed in the enrollment flow, and some customers who gave timely notice received no response and incurred additional charges.

The complaint further alleges that customers directed to Toast’s “Customer Care” line or live chat faced questions about why they wanted to cancel and sales pitches meant to dissuade them. It also alleges that cancellation is more costly for customers with balances on a Toast Capital loan: if a customer cancels or changes providers, Toast treats this as a loan default and requires immediate payment of the total outstanding balance.

On customer support, the complaint alleges nearly every page of Toast’s website highlights a claim that customers can reach support 24 hours a day, 7 days a week, and that Toast lists “24/7/365 support” as a feature in each subscription package. The plaintiffs allege customers in practice had difficulty reaching anyone who could provide support at any time of day. The complaint notes one consumer who called on a Saturday and was told the team that could help was not available on the weekend.

The complaint alleges the conduct violated the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA, a federal statute governing negative-option sales such as auto-renewing subscriptions) and related state laws.

What is established vs. what is alleged

Established: the FTC and the state co-plaintiffs filed a complaint against Toast Inc. and affiliated entities on October 29, 2026, in the U.S. District Court for the Northern District of California. The Commission vote authorizing the staff to file was 2-0. The FTC’s own note states that the Commission files a complaint when it has “reason to believe” the named defendants are violating or are about to violate the law. The case status listed in the FTC’s Legal Library is pending.

Alleged, not decided: every substantive claim in the complaint, including the hidden fees, the unauthorized add-ons, the $0.99 patron fee, the cancellation obstacles and the customer support claims. Toast has not been found liable in this case on the record supplied. No ruling, verdict or settlement appears in the FTC materials.

Where the claims stand procedurally

The case is a federal court lawsuit, not an administrative proceeding and not a consolidated class action. The complaint was filed in the U.S. District Court for the Northern District of California on October 29, 2026. The FTC’s Legal Library lists FTC Matter/File Number 252 3101 and a case status of “Pending,” last updated October 29, 2026. No trial date, injunction, settlement or appeal appears in the materials. The parties named are Toast Inc. and affiliated entities, sued by the FTC, the People of the State of California by and through the Los Angeles County Counsel and San Francisco City Attorney, and the Attorneys General of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah.

This federal enforcement action is distinct from private consumer litigation. Readers researching other government enforcement matters can compare the FTC’s inquiry into personalized pricing and compensation practices or its warning letters to healthcare plan marketers and lead generators.

Key dates

• October 29, 2026: The FTC and the eight state co-plaintiffs filed the lawsuit against Toast Inc. in the U.S. District Court for the Northern District of California.
• September 2021: The alleged $0.99 patron fee period began, according to the complaint.
• Late July 2023: The alleged $0.99 patron fee period ended, according to the complaint.
• October 29, 2026: The FTC’s Legal Library entry for Toast, Inc. was last updated with a status of pending.

What this does not establish

The materials do not show that any court has ruled on the allegations. They do not establish that Toast charged any particular restaurant or patron a specific hidden fee. They do not identify injured customers, name a certified class or set out any recovery. The complaint quotes individual consumer complaints and one example of a $5,318.87 early termination fee, but those are allegations, not findings. The records supplied do not include Toast’s response, any motion practice, a discovery schedule or a trial date.

Frequently asked questions

Who filed the Toast Inc. lawsuit and where?

The Federal Trade Commission, the People of the State of California and the Attorneys General of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah filed the lawsuit against Toast Inc. on October 29, 2026. The complaint was filed in the U.S. District Court for the Northern District of California. The FTC’s Legal Library lists the matter as pending.

What fees does the complaint allege Toast Inc. charged without disclosure?

The complaint alleges an $85 monthly payment processing charge for restaurants that close temporarily and an early termination fee of $150 per month for each remaining month of a contract. It also alleges Toast charged a $0.99 fee on certain online orders above $10 from September 2021 through late July 2023. Those figures come from the FTC’s allegations, not from a court finding.

Has a court ruled on the Toast Inc. allegations yet?

No. The FTC materials describe a complaint filed October 29, 2026, and list the case as pending in the U.S. District Court for the Northern District of California. The FTC notes that the case will be decided by the court. Every substantive allegation about fees, cancellation and customer support remains undecided.

Is there a Toast Inc. class action or settlement to join?

Nothing in the FTC materials describes a class action, a settlement or a claims process for restaurants or patrons. The action described is a government enforcement lawsuit brought by the FTC and state co-plaintiffs. The records supplied do not include any settlement or court-approved resolution.

How does the FTC describe Toast Inc.’s customer support promises?

The complaint alleges Toast marketed “24/7/365” customer support on nearly every page of its website and in each subscription package. The plaintiffs allege customers in practice could not reach help at any time of day. That claim is an allegation pending before the court.

Sources

1. Federal Trade Commission: “FTC and States Take Action Against Toast Inc. over Hidden and Unauthorized Fees, Deceptive Subscription and Cancellation Practices and Other Unlawful Conduct” (link, accessed 2026-11-02)
2. Federal Trade Commission: “Press Release Feed” (link, accessed 2026-11-02)
3. Federal Trade Commission: “Press Releases” (link, accessed 2026-11-02)
4. Federal Trade Commission: “Cases and Proceedings” (link, accessed 2026-11-02)
5. Federal Trade Commission: “Enforcement” (link, accessed 2026-11-02)
6. Federal Trade Commission: “About the FTC” (link, accessed 2026-11-02)