FTC and Nine States Sue Toast Over Hidden Restaurant Fees
The complaint says the restaurant software company added unauthorized charges and add-ons, hid a $150-a-month cancellation fee and quietly charged diners 99 cents on online orders. Toast hasn't been found liable.
The Federal Trade Commission, joined by Los Angeles County, San Francisco and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah, sued Toast Inc. on October 29, alleging that the restaurant point-of-sale and payments company burdens small restaurants with hidden and unauthorized fees and makes it hard to cancel. The complaint's claims are allegations; Toast has not been found liable.
According to the complaint, restaurants that didn't start processing payments within 120 days had to return their hardware or pay its full retail price; restaurants that had to close temporarily still owed $85 a month for payment processing; and customers who wanted to cancel faced an undisclosed early termination fee of $150 for each month left on their contract. The FTC also says Toast added a 99-cent fee to some online orders over $10 from September 2021 to late July 2023, which went to Toast rather than the restaurant, and enrolled restaurants in paid add-ons such as payroll and timekeeping without their consent.
If you run a restaurant or small business: read your payment processor's contract for early termination fees, minimums and auto-renewal terms, check monthly statements line by line for add-ons you didn't order, and save written confirmation of any cancellation. You can report problems with a business service provider at ReportFraud.ftc.gov.
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