FTC Takes Action Against Toast and Riverside Payments Over Hidden Fees and Deceptive Marketing Claims

Within four days, the FTC took on two payments companies over alleged hidden fees and unclear cancellation terms. On October 29, the FTC, seven state attorneys general and local officials filed a lawsuit against restaurant software and payments provider Toast. On November 2, the FTC and the state of Washington announced a proposed settlement with payment processor Riverside Payments. Both matters center on a familiar problem: a friendly headline claim that allegedly did not match the full price or the way out.

For marketing and compliance leaders at fintechs, banks and credit unions that sell payments, merchant services or subscription-style products, the takeaway is practical. Every price, saving, term and promise in an ad is a claim someone may test later. These are allegations, and Toast has said it strongly disagrees and will defend itself.

Alleged Hidden Fees and Cancellation Terms at Toast

The complaint says Toast advertised a "Pay-as-you-Go" plan with $0 per month hardware and software, while higher per-transaction fees and other charges were not clearly disclosed. The alleged examples include a requirement to return hardware or pay its retail value if a restaurant does not start processing within 120 days, and an early termination fee of $150 for each remaining month of a contract.

The FTC also points to a $0.99 fee on certain online orders between September 2021 and late July 2023, and to "24/7/365" support promises that customers allegedly could not rely on. One consumer was allegedly charged a $5,318.87 early termination fee. The complaint cites the FTC Act and the Restore Online Shoppers' Confidence Act.

What Riverside Payments Agreed To

The FTC alleges Riverside promised small businesses savings of 40% to 60% using quote sheets that left out several fees, and that a 26-page electronic contract did not clearly disclose automatic renewal, a $695 early termination fee or an equipment lease. It also alleges "risk-free" cancellation promises that were not honored.

Under the stipulated order, a $32,083,921 judgment is suspended after $600,000 is paid because of inability to pay. The defendants are barred from unsubstantiated savings claims and must clearly disclose material terms and offer a simple cancellation method before collecting billing information. The order is a settlement of allegations, not a finding of liability.

Three Patterns Marketers Should Recognize

1. The Headline Number and the Full Price Live in Different Places

A "$0" or "40% to 60% savings" claim is only as strong as the disclosures sitting next to it. In both cases, the alleged gap was between the attention-getting number and the fees found deeper in the contract.

2. Promises Need Proof

Savings figures, support hours and "risk-free" language are performance claims. The Riverside order specifically bars unsubstantiated savings claims, which is a reminder to keep the evidence behind each number.

3. Cancellation Is Part of the Offer

Renewal terms, termination fees and the steps to cancel shape what a customer is really buying. Teams that treat them as legal fine print, rather than marketing content, are more likely to miss a mismatch.

What Marketing and Compliance Teams Can Do

Start by listing every cost, term and service promise that appears in ads, landing pages, quote sheets and sales scripts, then trace each one to an approved source. Check that fees, renewal terms and cancellation steps appear where the headline claim does, not only in a long agreement.

Next, ask who owns each claim. Savings estimates and support promises often come from sales or product teams, so route them through the same review as the ad copy. Finally, keep records of who approved what and when, because that history is what you will want if a claim is questioned.