Federal, State, and Local Regulators Sue Toast Over B2B Advertising and Subscriptions

On October 29, 2026, the Federal Trade Commission (FTC) and attorneys general from Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah, joined by Los Angeles County Counsel and the San Francisco City Attorney, sued Toast over allegedly deceptive advertising, hidden fees, and cancellation barriers. The bipartisan lawsuit shows that federal, state, and local regulators continue to work together on consumer protection, including claims involving business customers. Like the Seek Capital, First American Payment Systems, and newly announced Riverside Payments matters discussed below, the Toast case concerns allegedly misleading sales claims, unexpected costs, and difficulty canceling services, this time in restaurant technology.

From “$0” promises to costly exits

The complaint challenges Toast’s “$0” hardware advertising and “24/7/365” customer support promises. It alleges that customers faced undisclosed costs and support that was unavailable or unable to resolve problems. It also challenges allegedly unauthorized subscription add-ons and a $0.99 online-order fee imposed on restaurant patrons without adequate disclosure or consent.

According to the complaint, customers trying to cancel had to submit written notice, speak with retention staff, and navigate transfers and internal processing while charges continued. Some allegedly faced unexpected termination fees, including $150 for each remaining contract month under certain plans. Toast Capital borrowers faced another alleged obstacle: canceling or switching providers triggered immediate repayment of outstanding loan balances.

Laws and remedies at issue

The FTC alleges that these practices violate Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). The ROSCA claims concern inadequate disclosure of material terms, failure to obtain express informed consent, and failure to provide a simple way to stop recurring charges. The state claims arise under consumer-protection and advertising laws, including California’s Unfair Competition and False Advertising Laws

The FTC seeks a permanent injunction and monetary and other relief under Sections 13(b) and 19 of the FTC Act and ROSCA’s enforcement provisions. The states separately seek civil penalties, restitution, damages, and attorneys’ fees. The complaint does not state a total monetary demand.

A broader B2B enforcement pattern

The Toast case is still at the complaint stage, but the allegations are familiar. In the Seek Capital, First American Payment Systems, and Riverside Payments matters below, the FTC challenged misleading promises, unexpected fees, or difficulty ending business-financing and payment-processing relationships. Toast involves similar allegations about restaurant software pricing, subscriptions, and customer support. These cases suggest that protecting business customers is a growing FTC enforcement focus, rather than a series of isolated actions.

Riverside Payments: On November 2, 2026, the FTC and Washington announced an action alleging that Riverside Payments and affiliate Cascade Equipment Leasing used misleading savings and “risk-free” cancellation promises to attract small businesses, failed to adequately disclose fees and auto-renewing contracts, and made cancellation difficult. The proposed settlement would impose a $32.1 million judgment, suspended after payment of $600,000 based on inability to pay. It would also give customers 60 days to cancel merchant-processing agreements without termination penalties and require clearer disclosures, express informed consent, and simple cancellation for negative-option plans.

Seek Capital: A settlement announced in November 2025 permanently banned Seek Capital and CEO Roy Ferman from business financing and certain other services. The FTC challenged promises of business loans or credit lines that allegedly resulted instead in costly credit-card openings, as well as misleading fee claims. A $48.3 million judgment was partially suspended based on inability to pay. See the FTC release and settlement order.

First American Payment Systems: In this comparable 2022 action, the FTC challenged deceptive fee claims, unauthorized withdrawals, and difficulty canceling services for business customers. Following a $4.9 million settlement, the FTC distributed more than $2.6 million in refunds in February 2025. See the refund announcement and complaint.

What in-house counsel should check now

For in-house counsel, these cases are reason to review what happens at each stage of the customer relationship, from sales promises to billing and cancellation. Start with three checks:

• Check that sales promises match actual practices. Compare advertisements, sales scripts, and enrollment screens with invoices and support staffing. Substantiate “free,” savings, and round-the-clock support claims before publication.
• Check consent and fee disclosures. Review a sample of customer files for affirmative authorization of each add-on and recurring charge. Keep timestamped disclosures and consent records and review termination fees together with financing acceleration triggers.
• Test the cancellation process from start to finish. Periodically test cancellations across products and affiliates. Remove unnecessary transfers and retention steps, confirm effective dates in writing, and check cancellation records against subsequent billing.