On October 29, 2026, the Federal Trade Commission and eight states sued Toast, the restaurant point-of-sale and payments company, in federal court in California. The complaint accuses Toast of hidden and unauthorized fees, subscriptions that are hard to cancel, and 24/7 support that customers say they couldn’t reach.
Toast denies the allegations and says it will fight the case. No court has ruled on any of it. But the practices the complaint describes are worth understanding, because the same kinds of terms turn up in POS and payments agreements across the restaurant industry. This guide summarizes what the case alleges, then turns it into a checklist any restaurant can use on its own agreement and statements.
This article summarizes public filings and news reports and explains common contract terms. It isn’t legal advice. If you’re considering canceling or disputing a contract, talk to a lawyer.
Key takeaways
- The FTC, California and seven other states allege that Toast added subscription add-ons without consent, advertised “$0” plans with costs recovered elsewhere, and made canceling difficult and expensive.
- These are allegations, not findings. Toast says it strongly disagrees and that the federal subscription law at the center of the case doesn’t apply to negotiated business agreements.
- There is no refund program. The plaintiffs are asking the court for restitution, but the case has just begun. Be wary of anyone offering to recover money for you.
- Whatever system you use, find four things in your agreement now: the renewal notice window, the early termination formula, what you owe if you close temporarily, and whether a loan from your provider comes due if you leave.
- Check your monthly invoice line by line against what you ordered, and look at a full year of statements so once-a-year fees show up.
What the complaint alleges
The case is United States of America, et al. v. Toast, Inc. et al., Case No. 3:26-cv-12705 in the U.S. District Court for the Northern District of California. The FTC’s announcement lists the plaintiffs: the FTC; the People of the State of California, through the San Francisco City Attorney and Los Angeles County Counsel; and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah. The claims are brought under the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA) and state consumer-protection laws.
According to the FTC and the San Francisco City Attorney, the complaint alleges:
- Add-ons nobody ordered. Restaurants enroll in auto-renewing monthly subscriptions priced by terminal count and bundled add-ons such as timekeeping, payroll and payroll tax filing. Customers frequently complained of being enrolled in and charged for add-ons without consent. San Francisco puts the average restaurant’s subscription and transaction fees at more than $900 a month.
- “$0” that wasn’t. A “Pay-as-you-Go” plan advertised hardware and software at $0 a month while, the complaint says, the costs were recovered through undisclosed fees.
- Fees for leaving, pausing or not starting. An early termination fee of $150 for each remaining month of the contract; $85 a month in processing charges owed by restaurants that close temporarily; and, for customers who don’t begin processing within 120 days, a requirement to return the hardware or pay its full retail value.
- A hard way out. Restaurants could sign up online but had to give 30 days’ written notice of their “intent not to renew”, a requirement the complaint says wasn’t clearly disclosed, or call or chat to cancel. Some say their notices went unanswered and the charges continued. Others were questioned and pitched to stay. One customer was charged a $5,318.87 early termination fee after four years and refused a refund.
- A loan that comes due. Restaurants with a Toast Capital loan that cancel or switch providers are treated as in default and must repay the whole balance at once, which the complaint says discourages leaving.
- Support that wasn’t there. Toast advertised “24/7/365” support. The complaint says customers struggle to reach anyone who can help. One owner who called on a Saturday was told the team he needed didn’t work weekends, which he says cost him thousands of dollars in card sales.
- A fee on diners. From September 2021 to July 2023, a 99-cent fee was added to certain online orders over $10. The complaint says it went to Toast, not the restaurant, and wasn’t adequately disclosed to diners or restaurants.
Restaurant Dive reports that the suit cites complaints from “at least tens of thousands of consumers”. San Francisco says the suit seeks penalties, restitution for affected restaurants, and a court order stopping the practices.
Toast’s response
Toast told Restaurant Dive it is “prepared to defend our business and fight this unprecedented action through litigation.” According to American Banker, the company says its restaurant customers negotiate their contracts, that it has cooperated with the FTC since mid-2025, including efforts to settle, and that no court has held that ROSCA applies to negotiated business-to-business agreements.
That last point may matter a great deal. ROSCA is best known as the law behind actions against consumer subscriptions that are easy to join and hard to quit. Whether it reaches a restaurant’s POS contract is for the court to decide. The state consumer-protection claims stand alongside it.
Why it matters to every restaurant
Bundled POS, software and payments is now the normal way restaurants buy technology, and the terms in this complaint aren’t unique to one company. In our post on what you’re really paying for when software comes with payments, we found similar features in other agreements: termination fees that multiply by terminals and months left, automatic renewals with narrow notice windows, inactivity fees, and annual fees that never show in a typical month.
None of those terms is unlawful in itself. The question the case raises is whether customers understood them and agreed to them. That is a question every owner can answer about their own system, today, without waiting for a court.
A checklist for your own POS agreement
Get the signed agreement, the order form and the most recent invoice. Then look for these:
- The renewal date and notice window. When does the term end, and how much written notice do you have to give not to renew? Put the deadline in your calendar now. Missing it often means another full year.
- The early termination formula. Is it a flat amount, the remaining subscription payments, or a monthly figure times terminals times months left? Work out what you would owe if you left this month.
- Every line on the invoice. Match each subscription or add-on to something you asked for. Payroll, timekeeping, online ordering, loyalty and marketing modules are common add-ons. If you didn’t order it, ask in writing for it to be removed and the charges refunded.
- Where a “free” or “$0” plan gets paid for. Usually it’s the processing rate, sometimes a hardware charge or a fee you agreed to elsewhere. Compare your total processing cost with a competitive quote for the same sales.
- What happens if you close temporarily. Seasonal closures, renovations and emergencies happen. Find out whether monthly minimums or processing charges keep running.
- Loans from your provider. If you took an advance or loan from your POS or payments company, read the default clause. Leaving, or moving processing elsewhere, may make the whole balance due at once.
- Fees on your guests’ orders. If your online ordering adds a fee to the diner’s bill, find out who keeps it and how it’s shown to your guests. Your customers will blame you, not the platform.
- How cancellation actually works. Is it in writing, by email, by phone or by chat? To whom? Keep a copy of what you send and any confirmation, and check the next statement to make sure the billing stopped.
- When support is really available. Find out which teams work nights and weekends, and how you’d take payments if your system went down on a Saturday night.
If you’re a Toast customer
- Don’t expect money soon. The case has just been filed. There is no claims process, and if there is ever restitution, it will come through the court. Treat anyone who offers to get your refund for a fee with caution.
- Gather your records. Save invoices, statements, your agreement and order forms, and every email, chat transcript and cancellation notice. Note the dates of support calls and what you were told.
- Report what happened to you. The FTC takes reports at ReportFraud.ftc.gov, and your state attorney general’s office takes consumer complaints. If you’re in one of the eight plaintiff states, that office is already involved.
- Don’t act on the lawsuit alone. Stopping payments or walking away from a contract because of allegations against the company can still leave you owing the termination fee. If you want out, read your agreement, give notice exactly the way it requires, and talk to a lawyer if the amount is large.
- Ask about unauthorized charges now. You don’t need a court case to dispute an add-on you never ordered. Put it in writing and keep the reply.
Where Statement Forensics fits
Statement Forensics reads processing statements line by line and lists every fee on them in plain English, including software, subscription and equipment charges billed through the statement. It shows which dollars go to the card networks and which go to your provider, and compares Visa and Mastercard charges with the networks’ published schedules. Send up to twelve months and once-a-year fees show up next to the monthly ones.
We don’t sell processing or software, have no processor, ISO or platform affiliation, and take no residuals or referral fees. We don’t review contracts or give legal advice, but the report gives you, or your lawyer, a clear list of what you’ve been charged.
Email a recent statement to audit@statementforensics.com.
Frequently asked questions
Why are the FTC and states suing Toast?
The complaint, filed October 29, 2026, alleges hidden and unauthorized fees, subscription add-ons charged without consent, “$0” plans with undisclosed costs, difficult and costly cancellation, unreachable 24/7 support, and a 99-cent fee on some diners’ online orders from 2021 to 2023. The FTC and eight states brought it under the FTC Act, ROSCA and state consumer-protection laws.
Has Toast been found to have broken the law?
No. A complaint is a set of allegations. Toast denies them and says it will fight the case in court, where a judge will decide.
Can Toast customers get a refund from the lawsuit?
Not now. The plaintiffs are asking for restitution for affected restaurants, but there is no claims process, and any money would come only through a court order or settlement. You can still dispute specific charges with Toast directly.
Does ROSCA apply to business contracts?
That is one of the questions in the case. Toast says no court has applied ROSCA to negotiated business-to-business agreements. The plaintiffs also rely on the FTC Act and state laws.
Is the 99-cent online ordering fee still charged?
According to the complaint, the fee was charged from September 2021 until July 2023.
Should I switch POS systems because of this case?
Not on the strength of the lawsuit alone. Find your renewal date, notice window and termination formula, price the exit, and compare your total cost, software and processing together, with alternatives. If the numbers favor leaving, give notice the way your agreement requires.