The American Arbitration Association (AAA) recently rolled out significant updates to its Consumer Arbitration Rules and Mediation Procedures, which took effect on May 1, 2025. These changes reflect AAA’s continued commitment to fairness, efficiency, and clarity in alternative dispute resolution. While AAA also revised its employment-related rules, this post focuses on what’s new for businesses handling consumer disputes.

Common types of claims that fall under the updated consumer arbitration rules include Telephone Consumer Protection Act (TCPA) claims, data privacy violations, false advertising, subscription billing disputes, warranty or product defect claims, and issues related to financial services or online transactions. Businesses operating in these areas should carefully review how the AAA’s revised procedures may affect dispute resolution outcomes.

Integrated Mediation Option

One of the most notable changes is the formal integration of mediation into the consumer dispute process. AAA’s newly launched Consumer Mediation Procedures (effective April 1, 2025) are now incorporated directly into the updated rulebook. This gives businesses and consumers a more accessible and cost-effective way to resolve disputes before arbitration becomes necessary.

Expanded Guidance on Claim Consolidation

The updated rules now allow AAA to consolidate multiple claims brought by the same consumer under a single contract into one case. Conversely, if claims stem from separate contracts, AAA can require them to proceed individually. While this administrative discretion initially lies with AAA, the final decision rests with the appointed arbitrator.

Virtual Hearings Now the Default

Acknowledging the evolution of remote dispute resolution, AAA’s revised rules now default to virtual hearings unless the parties agree otherwise, or the arbitrator orders an in-person proceeding. This adjustment can substantially reduce costs and logistical hurdles for both sides.

Enhanced Arbitrator Authority in Managing Disputes

The revisions also expand the powers of arbitrators to streamline the process. Arbitrators can now direct how parties exchange necessary information and enforce compliance through sanctions. These rules aim to ensure both fairness and efficiency while giving arbitrators tools to manage the process effectively.

Additionally, when there is disagreement over which arbitration clause governs a dispute, AAA will make an initial determination — subject to the arbitrator’s final decision.

New Appeals Framework

For consumer contracts that include an arbitration appeal process, AAA has introduced a formal rule to administer those appeals. The updated framework ensures that any appeal complies with the Consumer Due Process Protocol, and that fees and costs align with the Consumer Arbitration Fee Schedule.

Bottom Line

AAA’s updated Consumer Arbitration Rules mark a shift toward more streamlined, transparent, and consumer-friendly procedures. Businesses that rely on arbitration clauses should review these changes closely and consider how the integrated mediation procedures, virtual default settings, and new appeal framework could impact their dispute resolution strategies.

While this post focuses on the consumer rules, it's worth noting that AAA made similar structural updates to its employment arbitration rules as well — another reminder for organizations to keep their arbitration practices current.