Regulators’ crackdown on hard-to-cancel subscriptions has reached B2B software.
The Federal Trade Commission, together with the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah, plus Los Angeles County Counsel and the San Francisco City Attorney, sued Toast Inc. this week. The complaint, filed in the US District Court for the Northern District of California, accuses the restaurant software and fintech company of hidden fees, unauthorized charges and unwanted add-ons.
What the complaint alleges
Toast sells point-of-sale services through subscriptions, add-ons and financing. According to the complaint, its “Pay-as-you-Go” plan advertises $0 hardware and software but includes undisclosed fees and possible early termination charges. One customer was allegedly charged $5,318.87 after canceling.
The complaint also says Toast charged a $0.99 fee without adequate disclosure. Canceling allegedly required written notice, multiple contacts with customer service teams and, in some cases, sitting through sales pitches. Restaurants with Toast Capital loans may face accelerated repayment of their balance if they cancel or switch providers, the complaint says.
The support promise
Regulators also allege Toast falsely advertised “24/7/365” customer support. Customers reported long delays, no weekend support and problems that sometimes went unresolved for weeks or months.
Toast pushes back
Toast said it “strongly disagree[s]” with the allegations and will vigorously defend itself. Its central argument is legal: the FTC is applying the Restore Online Shoppers’ Confidence Act, or ROSCA, to Toast’s negotiated contracts with restaurants. “No court has held that ROSCA applies to negotiated business-to-business agreements, and we don’t believe it applies here,” the company said, warning the approach could disrupt B2B providers across the economy.
Toast says it has cooperated with the FTC since mid-2025 and that nearly 200,000 business locations run on its platform. The allegations have not been proven in court.
Why it matters
Click-to-cancel rules and fee transparency used to be seen as consumer issues. This case tests whether regulators can apply them to software sold to small businesses, and the outcome could affect B2B providers well beyond restaurants.
Every SaaS company with free or $0 entry offers, bundled add-ons or financing should review its pricing pages, contracts and cancellation flow now. For marketers, transparent pricing is no longer just good for conversion. It is also a legal safeguard and a trust signal buyers notice.
Sources: Nebraska Attorney General, Toast, Reuters via Investing.com. Written by the xRapid Media LLP team.
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