FTC, States Sue Toast Over Alleged Hidden Fees

The Federal Trade Commission, eight states and local officials in Los Angeles and San Francisco sued restaurant technology company Toast, alleging it misled restaurants about subscription pricing, added services without consent and made cancellations difficult. The complaint says restaurants pay about $900 a month on average and that Toast’s advertised “$0” hardware plan could involve undisclosed costs, unwanted payroll or employee-management tools, and steep early-termination fees; it also alleges Toast added a $0.99 fee to some online orders without adequate disclosure. Regulators allege customers faced hurdles canceling, were sometimes charged after canceling, and could face accelerated repayment of Toast Capital loans if they left. The complaint also challenges Toast’s claims of round-the-clock support, alleging delays and unresolved problems. Toast denies the allegations, says the FTC is misapplying federal online-subscription law to negotiated business contracts, and says it will contest the case; the claims have not been decided by a court.