Andrew Lustigman and Morgan Spina Quoted in Inc. on FTC Lawsuit Against Toast

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and Branding Department associate Morgan Spina were quoted in Inc.’s article, “Toast Is Facing an FTC Lawsuit Over Hidden Fees and Subscription Traps.” The article examines the Federal Trade Commission and eight states’ lawsuit alleging that Toast imposed hidden fees, unauthorized charges and difficult subscription cancellation terms on restaurant customers. Andy and Morgan discuss Toast’s argument that the federal subscription law at issue does not apply to negotiated restaurant contracts. Their analysis underscores that the outcome will depend on the particular facts surrounding the customer relationships and the contracting process. “The real question is whether Toast’s customers negotiated these contracts,” Andy and Morgan explain. “If they did, Toast has a credible argument that ROSCA was never meant to protect sophisticated businesses with lawyers reviewing every clause. If Toast is simply saying ‘our customers are businesses, so the law doesn’t apply,’ that’s a much harder position to defend, as the FTC regulates B2B marketing practices.” The case is a reminder that businesses offering recurring services should clearly disclose fees, obtain appropriate consent and maintain cancellation processes that align with their customer commitments. “Cancellation is one of the fastest ways for a subscription-based business to land in a regulator’s crosshairs,” they say. “The principle is straightforward: Leaving should never be harder than joining. If customers signed up online, they should be able to cancel online, and the option should be easy to find and quick to complete. Every extra step a company adds to the exit is a step a regulator can point to.”