Iowa Attorney General Brenna Bird has sued Toast, a company that sells restaurants their point-of-sale hardware, software and payment processing. In a release dated Oct. 29, 2026, the attorney general's office said the suit is over deceptive and fraudulent practices that hurt small restaurants in Iowa.

KCRG reported the lawsuit on Thursday, Oct. 29. The Des Moines Register, in a story republished by Yahoo News, reported that the suit was filed that day in California federal court and that eight states, Iowa among them, joined the Federal Trade Commission (FTC) in it. The attorney general's release does not mention the FTC as a party or name the court.

What the state says

The attorney general's release says Toast sells its software as a subscription that renews automatically, and also sells financing called Toast Capital Loans to existing Toast customers. The state's claims, as the release lays them out:

  • Toast told customers they would pay "$0" for its products under some pricing plans, but none of its hardware is $0.
  • Toast promised "24/7/365" customer support, but customers often say they cannot reach support at any hour.
  • Toast did not give customers a simple way to cancel, charged unexpected early termination fees and kept billing some customers without their consent.
  • Toast hid order processing fees from restaurants and their customers.

The release says thousands of people complained about these issues to the FTC, online and directly to Toast. Iowa's News Now reported the same allegations on Friday, Oct. 30.

Claims Journal, in a Bloomberg story by Leah Nylen, reported that the suit says Toast began charging consumers a 99-cent order-processing fee on digital orders above $10 in 2023, without clearly disclosing that the money went to Toast and not to the restaurant.

Iowa's own claim

The Register reported that Iowa is bringing its own claim in the case under the Iowa Consumer Fraud Act. The attorney general's release does not list the penalties or other relief the state is seeking.

"Instead, they got lies, deception, unexplained fees, and no customer support," Bird said in the release, speaking of the small restaurants that signed up. "Toast needs to be held accountable, and Iowa small businesses need to be made whole."

The case is separate from a suit over prices at the register that Iowa, the FTC and 19 other states filed against Dollar General on Oct. 26, which TFS News covered on Oct. 27.

Toast responds

Toast strongly disagrees with the allegations and will defend itself in court, the Register reported, citing a company news release. Toast argues the suit wrongly applies a federal consumer protection law, the Restore Online Shoppers' Confidence Act, to contracts that businesses negotiate with each other. The company said that applying the law this way "has the potential to rewrite the laws of commercial contracts" and could "disrupt business-to-business providers across the economy, ultimately resulting in less competitive terms and more harm to small businesses," according to the Register.

"We are prepared to defend our business and fight this unprecedented action through litigation," Toast said, the Register reported.

Claims Journal's Bloomberg report also said Toast will fight the suit. Toast said no court has held that the law applies to negotiated business-to-business agreements and that it does not believe the law applies here.

About this story

TFS News has no tie to any campaign, party or committee and takes no payment from them. This story is based on the public records and published reporting linked below.