Toast faces FTC lawsuit over billing practices and cancellation terms

The Federal Trade Commission (FTC), alongside attorneys general from eight states, has initiated legal action against restaurant management software provider Toast. The lawsuit alleges that the company engaged in deceptive billing practices, including the enrollment of clients in subscription services without clear consent and the implementation of obstacles to prevent account cancellations.

According to the complaint, Toast allegedly utilized "dark patterns"—user interface designs intended to manipulate consumer behavior—to obscure subscription terms. The regulators argue that these practices caused business clients to incur unwanted charges, with the company reportedly continuing to bill some customers even after they attempted to terminate their services.

Toast has publicly stated that it intends to contest the allegations. In a brief statement following the filing, the company characterized the claims as inaccurate and confirmed it will defend its business operations in court.

This legal challenge arrives as federal regulators increase their scrutiny of subscription-based business models and the transparency of online fee structures. If the allegations are substantiated, Toast may face court-ordered changes to its billing platform and potential financial penalties.