Toast FTC Lawsuit: What to Check in Any POS Contract
3 November 2026 · 9 min read
What happened
On 29 October 2026 the Federal Trade Commission filed a complaint against Toast Inc. in the U.S. District Court for the Northern District of California. Joining it: the People of the State of California through the Los Angeles County Counsel and the San Francisco City Attorney, and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah. The case is brought under the FTC Act, the Restore Online Shoppers' Confidence Act (ROSCA) and state laws (FTC press release, case page).
What the FTC alleges
| Area | What the complaint alleges |
|---|---|
| "$0" plan | The Pay-as-you-Go plan advertises $0 monthly hardware and software, with higher per-transaction and other fees not clearly disclosed |
| Hardware | Customers who don't start processing within 120 days must return all hardware or pay its full retail value |
| Closures | Restaurants that close temporarily still pay $85 a month for payment processing |
| Cancelling | An undisclosed early termination fee of $150 for each remaining month; one customer was charged $5,318.87 after four years. 30 days' written notice of "intent not to renew", not clearly disclosed at enrolment; notices unanswered and charges after cancelling |
| Online orders | From September 2021 to late July 2023, a $0.99 fee on certain online orders over $10, which went to Toast rather than the restaurant |
| Add-ons | Customers enrolled in and charged for add-ons such as payroll processing and payroll tax filing without consent |
| Loans | Cancelling or changing providers with a Toast Capital loan balance treated as a default, with the full balance due at once |
| Support | "24/7/365" support promised, which customers say they couldn't reach |
What Toast says
Toast denies the charges. It argues that ROSCA, a law written for online consumer subscriptions, doesn't apply to negotiated business-to-business agreements, says it had been working with the FTC since mid-2025 to resolve the matter, and says it will fight the case in court (Restaurant Dive, Nation's Restaurant News). Nothing has been decided yet.
The 10-point checklist for any POS contract
The useful question isn't whether the allegations will be proven. It's whether your own agreements contain the same kinds of terms. Pull out every document you signed (software, processing, hardware, loans) and check:
- Early termination fee: is it a flat amount, or a charge per remaining month? Work out what leaving today would cost.
- Renewal and notice: does the contract auto-renew, and how many days' written notice does it need, sent where?
- Hardware: do you own it, lease it, or owe its full price if you stop processing or leave?
- Processing lock-in: can you use a different processor without changing POS, or does the software require the vendor's own payments?
- Closures: do monthly or minimum processing fees continue while you're closed for a renovation or the season?
- Add-ons: list every product on your invoice (payroll, marketing, loyalty, online ordering) and confirm you agreed to each one.
- Loans and advances: does switching providers trigger immediate repayment of a capital loan or merchant cash advance?
- Support promises: what hours and response times are actually in the contract, not the brochure?
- Fee changes: can the vendor raise fees during the term, and how are you notified?
- Your data: can you export menus, customers, gift-card balances and sales history in a usable format, and is that free?
Our POS contract termination guide covers how to negotiate an exit, and the switching checklist covers moving without losing a day of sales.
If you're reviewing your POS now
- Don't cancel in a hurry. Send renewal or cancellation notices exactly as your contract requires, in writing, and keep proof of delivery.
- Separate processing from software where you can. A processor-agnostic POS lets you keep a processor or agent you trust and change the software, or the other way round.
- Ask any new vendor for its termination, renewal, hardware and fee-change terms in writing before you sign, and compare them with the list above.
KwickPOS is processor-agnostic and sold and supported through local partners; find a KwickPOS reseller near you and ask for its terms in writing, the same as any other vendor.
Sources
- FTC: FTC and States Take Action Against Toast Inc. (29 Oct 2026)
- FTC case page: Toast, Inc. (252-3101)
- Restaurant Dive: FTC, states sue Toast over fees
- Nation's Restaurant News: Toast is sued by the FTC
Checked 3 November 2026. We will update this page when the court rules or the parties settle.