Salt Lake City, UT — Utah has joined the Federal Trade Commission, six other states, and two local governments in suing Toast, Inc., alleging the company misled restaurant owners with deceptive pricing, false customer support claims, and hidden fees. Utah Attorney General Derek Brown is part of the bipartisan coalition that filed the suit on Thursday.
Toast provides point-of-sale hardware and software, and payment processing services to small businesses in the restaurant industry. According to the complaint, Toast made false claims to persuade customers to sign up for its subscription services. Utah brings its claims under the Truth in Advertising Act, which prohibits deceptive trade practices.
“Toast promised restaurant owners $0 for hardware and 24/7 customer service,” said Attorney General Brown. “The complaint alleges neither promise was kept. Small businesses deserve to know the true cost before they sign, and my office will hold companies accountable when they hide it.”
The complaint alleges:
- “$0” pricing claims. Toast advertised that customers would pay $0 for its point-of-sale products. None of those products are priced at $0.
- Customer support claims. Toast advertised “24/7/365” customer support. Customers frequently report difficulty reaching support at any hour.
- Undisclosed fees. Toast charges multiple fees that are not clearly and conspicuously disclosed. These include add-on subscriptions customers did not agree to and early termination fees that can reach $5,000 to $17,000.
- Cancellation delays. Toast’s cancellation process is cumbersome. It often delays account deactivation for months while Toast continues to charge customers.
- Fees on online orders. Toast has charged restaurant customers fees on some online orders without their consent. Those fees go directly to Toast and are not refunded to the restaurants or their customers.
The coalition is asking the court to order Toast to stop violating federal and state law and to pay civil penalties and damages. The Attorneys General of Colorado, Florida, Illinois, Iowa, Nebraska, and Oklahoma as well the county of Los Angeles and the city of San Francisco joined Utah and the FTC in the suit.