WASHINGTON (dpa-AFX) - The U.S. Federal Trade Commission (FTC), along with California and seven other states, has filed a lawsuit against Toast Inc. (TOST), alleging that the restaurant software and fintech company charged restaurants hidden and unauthorized fees, added unwanted services and made it difficult to cancel subscriptions.
'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. These practices are illegal, and the FTC will continue to take aggressive action to ensure a fair, transparent and competitive marketplace,' said Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection in a release.
The complaint, filed in a California federal court, also accuses Toast of failing to provide its advertised 24/7 customer support and imposing early termination fees. It further alleges that the company charged restaurant customers an undisclosed $0.99 fee on certain online orders between September 2021 and July 2023.
The lawsuit alleges violations of federal consumer protection laws and related state laws.
Toast has rejected the allegations and vowed to defend itself.
The company said it has been cooperating with the FTC's investigation since mid-2025 and argued that the law cited by the FTC does not apply to its negotiated business-to-business agreements with restaurant customers. It added that the lawsuit would not affect its pricing, customer service or support.
TOST shares dropped more than 1% in after-hours trading on the NYSE, after closing at $31.50 on Thursday.
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