FTC, Eight States Sue Toast Over Hidden Fees and Subscription Traps; TOST Falls 1% After Hours

The U.S. Federal Trade Commission and California plus seven other states filed a lawsuit against Toast Inc. (TOST) alleging the restaurant software company imposed hidden and unauthorized fees, added unwanted services and created subscription traps that made cancellation difficult. The complaint, filed in a California federal court, accuses Toast of charging an undisclosed $0.99 fee on certain online orders between September 2021 and July 2023, failing to deliver advertised 24/7 customer support and imposing early termination fees. It alleges violations of federal and state consumer protection laws. Toast rejected the allegations, saying it has cooperated with the FTC's investigation since mid-2025 and that the statute cited does not apply to its negotiated business-to-business agreements. The company said the suit will not affect its pricing or customer support. TOST fell more than 1% in after-hours trading on the NYSE after closing at $31.50 on Thursday.