Under what circumstances can mandatory arbitration clauses in consumer contracts be challenged or refused?

The Federal Arbitration Act (1925) strongly favors arbitration agreements and preempts many state law challenges. However, courts have invalidated arbitration clauses that are procedurally unconscionable (buried in fine print with no meaningful opportunity to negotiate) combined with substantively unconscionable terms (such as prohibiting class actions for small consumer claims, requiring arbitration in a distant city, or imposing unaffordable filing fees). Congress has explicitly prohibited mandatory arbitration for certain claims including sexual harassment and assault under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (2022). The Consumer Financial Protection Bureau has also attempted to restrict class action waivers in financial contracts.