Nebraska joined the Federal Trade Commission and six other states in a lawsuit filed against Toast Inc. and affiliated companies over alleged hidden fees, unauthorized charges and subscription practices that businesses could have difficulty ending.
The complaint was filed Oct. 29 by the FTC, California officials and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah. The case accuses Toast, a restaurant-focused point-of-sale and financial technology company, of violating consumer protection laws in its dealings with small businesses.
Allegations about subscriptions and fees
Toast sells hardware and software for point-of-sale operations, payment-processing services and financing products known as Toast Capital loans. Its cloud-based products are offered through annual or two-year subscriptions that are billed monthly, according to the complaint.
The lawsuit alleges that restaurants are required to enroll in automatically renewing subscriptions that can include additional services. Those add-ons include employee timekeeping, payroll processing and payroll-tax filing. The complaint says customers were enrolled in and charged for some add-ons without their consent.
- The complaint alleges Toast imposed hidden or unauthorized fees.
- It accuses the company of failing to deliver on customer-support promises.
- It alleges that cancellation required 30 days’ written notice of an intent not to renew.
The complaint also challenges Toast’s advertising of a “Pay-as-you-Go” plan. Under that plan, customers can receive hardware and software for $0 per month while paying higher transaction fees, but the lawsuit alleges that additional charges were not clearly disclosed.
“Toast failed to honour a number of its promises and instead imposed hidden fees, unauthorised charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers.”
— Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection
Mufarrige said the alleged practices were illegal and that the FTC would continue pursuing enforcement to promote a marketplace that is fair, transparent and competitive. The allegations remain claims in a newly filed lawsuit, and the case has not resulted in a judgment establishing liability.
The legal action places Nebraska among the states participating in the federal consumer-protection case. The complaint seeks to address the companies’ alleged fee disclosures, enrollment practices, customer-support representations and cancellation procedures.
