Toast faces FTC lawsuit over business contract practices

Toast, a restaurant management tech company, faces a lawsuit from the FTC and eight states over alleged deceptive practices, including hidden fees and difficult subscription cancellations. The FTC claims Toast violated consumer protection laws, while Toast disputes the allegations, stating it has cooperated with the FTC's review and will defend itself in court.

The FTC and eight states sued Toast Inc. (TOST), alleging hidden fees, unauthorized charges, and difficult cancellations. The complaint also cites lack of advertised customer support and undisclosed fees on online orders. Toast denies the allegations, stating the lawsuit won't impact its operations. TOST shares fell over 1% in after-hours trading.

The FTC and eight states sued Toast (TOST), alleging hidden fees, unauthorized charges, and deceptive subscription practices. The complaint claims the restaurant software company failed to deliver on customer promises.

Toast (NYSE: TOST) disputes an FTC lawsuit alleging violations of the Restore Online Shoppers' Confidence Act in its business-to-business agreements. The company plans to defend itself, stating the lawsuit could disrupt commercial contracts and harm small businesses. Toast maintains its commitment to customers and expects no changes to its services. The FTC has been investigating since mid-2025, and Toast had sought a resolution before litigation.

The FTC and state attorneys general sued Toast Inc., alleging hidden fees, deceptive add-ons, and difficult cancellation processes. The company's practices are under scrutiny for potential consumer harm, according to the FTC's statement.

Toast (TOST) stock rose 6.6% after BofA Securities resumed coverage with a Buy rating and $40 price target, citing its AI-driven market position. The stock is volatile, down 6.7% YTD, and trading 18.6% below its 52-week high. Lower interest rate expectations benefit growth-oriented tech firms like Toast.