FTC, States Sue Toast in Consumer Protection Case Over Fees

Key takeaways:

• The FTC and a group of state and local officials sued Toast Inc. on Thursday, Oct. 29, 2026.
• The complaint alleges hidden and unauthorized fees, unwanted add-ons, unmet support promises and a difficult cancellation process.
• The allegations have not been proven in court.

The news: The Federal Trade Commission has filed a lawsuit against Toast Inc. and affiliated entities. It is joined by California, acting through the Los Angeles County Counsel and the San Francisco City Attorney, and by the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah. The suit targets a company that markets and sells point-of-sale hardware and software to restaurants. It also operates as a fintech business.

The plaintiffs allege Toast saddles restaurants with hidden fees, unauthorized fees and unwanted add-ons. They also say it fails to deliver on its customer support promises and makes it hard for customers to cancel.

Why it matters: Although the case centers on businesses, the complaints will sound familiar to households: surprise charges, extras nobody asked for, and cancellation hurdles. Small restaurants often run on thin margins, so recurring fees that were not clearly disclosed or authorized can quickly eat into profit. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said Toast “failed to honor a number of its promises” and imposed “hidden fees, unauthorized charges and subscription traps.” He said those practices are illegal and the agency will keep taking “aggressive action” to promote a fair, transparent and competitive marketplace.

The big picture: The case fits a broader enforcement theme: regulators treating subscription terms, add-on charges and exit barriers as consumer protection problems, whether the customer is an individual or a small business. The mix of federal, state and local plaintiffs also shows that enforcement on these practices is not limited to Washington. Cities and counties in California are participating alongside several state attorneys general.

By the numbers:

• 1 federal agency, the FTC
• 2 California local offices: the Los Angeles County Counsel and the San Francisco City Attorney
• 7 state attorneys general: Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah

What’s next: The lawsuit is at its opening stage, and the claims are allegations that Toast can contest. Watch for the company’s formal response in court, any motions to dismiss, and whether other states or local governments join. Business owners who use any point-of-sale or payments service should review their contracts and monthly statements for fees they do not recognize. They should also check how cancellation works before they need it.