FTC Sues Toast Over Hidden Fees and Cancellation: What It Named

November 2, 2026. On 29 October 2026 the Federal Trade Commission, joined by the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah and by Los Angeles County and the San Francisco City Attorney for California, sued Toast Inc. and affiliated entities, the restaurant point-of-sale and payments company, in the Northern District of California. The complaint alleges that Toast "saddles restaurants with hidden fees, unauthorized fees and unwanted add-ons; fails to deliver on its customer support promises; and makes it difficult to cancel its services," in violation of the FTC Act, the Restore Online Shoppers' Confidence Act and state laws, according to the FTC's press release of that day. The specific practices named are the useful part for anyone who sells software on a subscription: a "$0 per month" hardware-and-software plan alongside fees the complaint says were not clearly disclosed, including a requirement to return the hardware or pay full retail if a merchant did not start processing payments within 120 days, an $85 a month charge during temporary closures and an undisclosed early termination fee of $150 for each remaining month; a $0.99 fee added to customers' online orders; a 30-day written notice of "intent not to renew" that the complaint says the enrollment flow did not clearly disclose; and "24/7/365 support" that, in one complaint the FTC cites, could not help a restaurant on a Saturday. Toast has not been found liable; the FTC's release notes that "the case will be decided by the court." Here is what the complaint alleges and what a SaaS or agency billing team can take from it.

Who sued and under what law

The FTC's release describes a coalition: the Commission, "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 the States of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah." The Commission vote to file was 2-0. The legal theories are "the FTC Act, the Restore Online Shoppers' Confidence Act and related state laws." Toast, per the release, "markets and sells point-of-sale hardware and software and payment processing services to small businesses in the restaurant industry" and "sells its software as an annual or biennial subscription service, billed monthly," alongside "Toast Capital loans" to existing customers.

Christopher Mufarrige, Director of the Bureau of Consumer Protection: "Toast failed to honor a number of its promises and instead imposed hidden fees, unauthorized charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers."

The fees the complaint names

The release summarizes the allegations in dollar terms. Every figure below is an allegation in the complaint, as the FTC describes it.

The complaint also alleges that "Toast customers frequently complain that they have been enrolled in, and charged for, Toast subscription add-ons without their consent," with "employee timekeeping, payroll processing and filing of payroll taxes" given as examples of add-ons.

The cancellation process as alleged

This is the section a subscription business should read twice. The release says Toast "makes it difficult to cancel its services" and that, as the complaint alleges, Toast "instituted a counterintuitive, multi-step cancellation process that requires the involvement and coordination of multiple teams within Toast, leaving many customers to incur months or years of unwanted charges." The steps, as alleged:

1. Customers "must first provide 30 days' written notice of their 'intent not to renew'", which the release calls "a requirement that is not clearly disclosed in the enrollment flow."
2. "Even if they provide timely written notice, multiple consumers report receiving no response and incurring additional charges."
3. "Others are told to call Toast's 'Customer Care' or contact Toast via live chat where they are subjected to questions about why they want to cancel and sales pitches to dissuade them from canceling."
4. Cancellation can trigger the undisclosed $150 per remaining month early termination fee, and for customers with a Toast Capital balance, the complaint alleges, Toast "treats this as if the customers have defaulted on their loan and requires them to immediately pay the total outstanding amount of the loan."

The support claim

Another theory in the complaint is about a marketing promise rather than a fee. The release says "nearly every page of Toast's website highlights some variation of the claim that Toast customers will be able to get help from Toast customer support 24 hours a day, 7 days a week," and that enrollment lists "24/7/365 support" as a feature of each package. The FTC alleges that "in reality, consumers have difficulty reaching anyone who can provide support or answer their questions at any time of day," and cites "one consumer called Toast customer support on a Saturday only to be told that the team that could help him was not available on the weekend, costing the small business owner thousands of dollars in credit card transactions."

What a SaaS or agency should take from the complaint

None of this has been decided, and the release is careful to say the complaint reflects a "reason to believe," not a finding. The practices it singles out are still a checklist for anyone billing recurring fees to small businesses, including agencies that resell software under their own brand:

1. Put every fee where the price is. The clawback, the closure charge and the termination fee are alleged problems because, the FTC says, they were not clearly disclosed to customers, not because they existed.
2. Make cancellation as short as sign-up. A notice period not clearly disclosed at enrollment, a written-notice requirement, and retention calls or chats with sales pitches are each named in the complaint. If a customer can start in a browser, they should be able to stop in one.
3. Do not add paid features without a recorded yes. Add-ons charged "without their consent" is the allegation that closes the release's enrollment paragraph.
4. Only promise the support you staff. "24/7/365" in every package listing is a factual claim. If the team that can fix a payment outage does not work Saturdays, the page should not say it does. We looked at the gap between uptime promised on pricing pages and uptime written into contracts for AI phone agents in AI receptionist downtime.
5. Separate financing from the subscription. Treating a cancellation as a loan default is one of the complaint's allegations. If you offer financing, its terms should stand on their own.

Agencies that run client software on a white-label platform bill their own subscriptions and write their own cancellation terms, so the complaint's checklist applies to them directly; see our white-label SaaS service for how we set that up, and cancel an AI receptionist and keep your number for what an honest exit clause looks like on the vendor side. This is general information, not legal advice.