The agency and eight states allege that the point-of-sale services provider charges its restaurant clients and their customers hidden fees.

The Federal Trade Commission and eight states sued Toast on Thursday, alleging that the point-of-sale company misled restaurant clients and their customers with hidden fees and subscription plans that were difficult to cancel.

The lawsuit also said that Toast failed to deliver the customer support help that it had pledged, and obscured a 99-cent fee Toast collected from consumers who placed online orders.

“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 FTC’s Bureau of Consumer Protection director, Christopher Mufarrige, said Thursday in a press release.

The FTC was joined in the lawsuit by California and attorneys general in seven states: Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah.

The lawsuit, filed in U.S. District Court for Northern California, says that “at least tens of thousands of consumers have complained about these issues to the FTC, online, and directly to Toast.”

Toast said in a press release that it disagreed with the allegations “and will vigorously defend” itself against the claims.

“Toast has been cooperating fully with the FTC's review of this matter since mid-2025 and has engaged in good faith throughout, including efforts to reach a resolution short of litigation,” the company said. “The FTC disregarded the information we provided showing the extent to which our restaurant customers negotiate their contracts.

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