Restaurants using Toast face hidden charges and obstacles to ending subscriptions, according to a lawsuit the Federal Trade Commission and state plaintiffs filed October 29. The complaint also alleges Toast imposed a fee on restaurant patrons without adequate disclosure or consent.
The case against Toast and affiliated entities was filed in the U.S. District Court for the Northern District of California. Its claims remain allegations for the court to decide.
The costs challenged
Toast sells restaurant payment-processing services and point-of-sale hardware and software. The complaint alleges customers were enrolled in subscription add-ons without consent and that advertised pricing did not clearly disclose important charges.
For its Pay-as-you-Go plan, the complaint alleges customers face a $150 fee for each remaining contract month if they cancel, a condition not disclosed in the enrollment disclosures the complaint describes. It also alleges restaurants that close temporarily must pay $85 a month for payment processing.
The complaint challenges an additional 99-cent charge on certain online patron orders above $10. It says the fee began at some locations around September 2021, reached all Toast customer-restaurants by at least June 2023 and was rolled back in late July 2023. According to the complaint, the money went to Toast rather than the restaurant. This is an allegation about a past fee, not notice of a new charge today.
Cancellation and outstanding loans
The complaint alleges customers must give written notice at least 30 days before the subscription term ends, while the enrollment process does not clearly disclose that requirement. It describes customers who allegedly kept receiving charges despite giving timely notice.
For customers with Toast Capital loan balances, the FTC's announcement says cancellation or a provider change can trigger immediate repayment of the outstanding loan under the challenged terms. The plaintiffs allege that this creates another obstacle to ending the subscription.
What the plaintiffs seek
The complaint requests a permanent injunction against future violations, monetary and other relief, and state-law remedies including civil penalties and restitution. Those requests do not establish a refund entitlement or a payment timetable.
No company response or later court ruling was read for this record. The FTC's announcement says the court will decide the case.