Why Some POS Vendors Are Getting Sued for Hidden Fees

For years, the most expensive number in restaurant tech was $0. Now federal regulators want a judge to look at the math.

The Line Item Nobody Remembers Agreeing To

It’s 2:40 on a Tuesday, the dead zone between lunch and dinner. The dough is balled, the make line is restocked, and the owner finally sits down with last month’s processing statement. Somewhere between the batch totals and the card mix sits a line called “Other Fees.” Nobody remembers agreeing to it. Nobody on the support line can explain it. It has, however, been there every month since spring.

For most of the last decade, that line item was a private annoyance. Operators grumbled, paid it, and went back to work. In 2026, it became a federal case.

What Happened: Regulators Took a POS Giant to Court

On October 29, 2026, the Federal Trade Commission sued a publicly traded restaurant POS company in federal court in Northern California. This isn’t a fringe player. By its own count, nearly 200,000 business locations run on its platform.

The FTC didn’t file alone. The attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah joined the case, along with the State of California through the Los Angeles County Counsel and the San Francisco City Attorney. The complaint alleges violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and state consumer protection laws. The director of the FTC’s Bureau of Consumer Protection put it plainly: “These practices are illegal.”

The company says it “strongly disagrees” with the allegations and will fight the case in court. Nothing has been proven, and a judge will decide who’s right. But the complaint lays out the fees in plain numbers, and every restaurant owner should read that list.

The Fees at the Center of the Case

Here’s what the FTC and its co-plaintiffs allege restaurants and their customers were charged:

*Allegations from the FTC’s complaint and press release. The company denies them, and none have been decided in court.

“Free” hardware works a lot like a free puppy. The adoption costs nothing. Everything after that is a line item.

The $0.99 fee deserves its own moment. Your customer paid it. Your restaurant’s name was on the order. None of the money came to you. That’s a rare business arrangement: you take the blame and someone else takes the dollar.

The Exit Was Part of the Product

Signing up took minutes. According to the complaint, leaving took a process:

1. A written notice of “intent not to renew,” delivered at least 30 days before the term ended. The FTC says this wasn’t clearly disclosed at enrollment.
2. A call to customer care, where the complaint says customers met questions and sales pitches.
3. A transfer to a non-public cancellation line that kept weekday business hours, Eastern time.
4. A deactivation form, completed over the phone.
5. Back-office processing. Some customers who followed the rules got no response and were billed again anyway.

Payroll customers allegedly needed 90 days’ notice. Owners with a business loan through the same company faced a harder wall: switching POS providers counted as a default, which made the full balance due at once.

Meanwhile, the company advertised “24/7/365” support. The FTC says one owner who called on a Saturday was told nobody who could help worked weekends, a gap that cost thousands of dollars in card transactions. A cancellation line on banker’s hours and a support line that takes weekends off. If you’ve ever tried to quit a gym, the format will feel familiar.

When it takes five steps and a sales pitch to leave, the exit is part of the pricing.

It’s Not Just One Company

The federal case is the loudest, but it isn’t alone. In 2026, a group of dental practices and other small businesses in North Carolina filed a proposed class action against their payment processor. The complaint targets monthly recurring fees labeled “PCI DSS Compliance,” “Non-PCI Charge,” “Safe-T SMB Fee,” and “Other Fees,” which together ran almost $100 a month.

How were the fees disclosed? Allegedly in small print, in a section of the monthly statement titled “News for You.” Technically, it was news.

The plaintiffs claim the notices never amounted to a valid contract change. They’re suing under North Carolina’s Unfair and Deceptive Trade Practices Act, along with breach of contract and unjust enrichment. As attorneys at Venable noted, what’s new isn’t the fees. Merchants have fought processor charges for years. What’s new is the “junk fee” label, borrowed from the consumer pricing fights over concert tickets and hotel resort fees, and now aimed at what vendors charge their business customers.

Why This Is Happening Now

Two forces met in the middle.

The first is a business model. A lot of restaurant tech is sold with little or nothing upfront: discounted terminals, free software tiers, setup on the house. That money has to come back somewhere. Usually it comes back through processing markups, subscriptions, add-ons, and the cost of leaving. None of that is illegal on its own. It gets a vendor in trouble when the restaurant can’t see it at the moment it signs.

The second is the law catching up. ROSCA was written to protect people from online subscriptions they can’t cancel. The FTC is now applying it to merchant agreements between businesses. The company being sued argues that “no court has held that ROSCA applies to negotiated business-to-business agreements.” That’s the question the case will answer.

If the FTC wins, every vendor with an auto-renewing merchant agreement will be rereading its enrollment flow. If it loses, the fees don’t get any smaller. They just get harder to fight. Either way, the burden lands on the operator to read closely before signing.

How to Spot Hidden Fees in Your POS Contract

You don’t need a lawyer to run this check, though it never hurts to have one. You need your agreement, your last three statements, and twenty quiet minutes.

1. Find out what “$0” covers. Which terminals, for how long, and what happens to the hardware if you leave?
2. Get the termination fee in dollars. “$150 times remaining months” is a dollar figure waiting to happen. Have the rep do the math for month one and month 24.
3. Learn the cancellation process now. Find the notice window and the method. If it calls for written notice 30 or 90 days out, put the date on your calendar the day you sign.
4. Name every recurring charge. Anything called “compliance,” “non-compliance,” “service,” or “other” should come with a one-sentence explanation.
5. Audit your add-ons. Payroll, timekeeping, marketing, loyalty. Confirm you opted into each one.
6. Check what your customers pay. Place a test online order and read every fee line before you hit submit.
7. Untangle your financing. If switching POS providers triggers a loan default, your loan is a lock.
8. Test the support promise. Call at 8 on a Saturday night. See who answers.

Shopping for a new system? Here are 12 questions to ask before switching pizza POS, and a closer look at how hardware and payment lock-in raise your costs.

Where Adora Stands

Adora POS was built by pizza people, for pizza people, and it’s built around operator control. It’s hardware-agnostic, running on Windows terminals, tablets, iPads, and most standard devices, so your hardware isn’t a hostage. It’s payment-processor-agnostic, so you pick the processor and negotiate your own rate. And when we say 24/7/365, someone picks up on Saturday:

• U.S.-based support that’s never outsourced
• An average wait of about one minute
• A 96% one-touch ticket resolution rate
• Support included in every contract, with no per-call fees

Bring the checklist above to your demo. Ask us every question on it. We’d rather earn your renewal than engineer it.

Ready to see a POS with nothing hiding in the fine print? Schedule your Adora demo.