New York’s Attorney General is asking a state court to shut down an online arbitration service that, according to the state’s petition, decided thousands of merchant cash advance (MCA) disputes and almost never ruled for a small business. The case, filed in June 2026 against Mediation and Civil Arbitration, Inc., which operates as RapidRuling, is still pending. As of early October 2026, no ruling on the merits has been reported.
The allegations are not proven. But the case puts a spotlight on a collection tool many business owners do not know exists: an arbitration award entered without their participation, later converted into a court judgment that can freeze a bank account. This article explains what the Attorney General alleges, how these awards become enforceable, how to find out whether one exists against your business, and what options may be available to challenge it.
CredibleLaw is a national legal resource and attorney referral network, not a law firm. This article is general information, not legal advice.
- The New York Attorney General filed a petition on June 9, 2026, in New York County Supreme Court (Index No. 452192/2026) against Mediation and Civil Arbitration, Inc., doing business as RapidRuling, and its two co-founders.
- The petition alleges that of 2,760 MCA arbitrations reviewed as of March 30, 2023, 97.4% were uncontested, and merchants prevailed in only one of 82 contested matters.
- The state seeks a permanent injunction, dismissal of pending MCA arbitrations, restitution, and civil penalties. The court has not yet ruled.
- Under New York law, an award can be confirmed as a court judgment if the application is made within one year of delivery. A motion to vacate generally must be made within 90 days of delivery.
- Business owners who may have been named in an MCA arbitration should check court records and review any notices they received, including email.
Found an arbitration award or a frozen account you did not expect?
CredibleLaw can connect you with an independent attorney who handles MCA arbitration, judgments, and bank restraints.
Call 888-201-0441 Request a Case ReviewWhat the Attorney General Alleges
According to the Attorney General’s announcement and the petition filed with the court, RapidRuling marketed itself as a neutral forum for resolving disputes. The state alleges it was in fact developed in coordination with an MCA company and structured to favor MCA funders. Specific allegations include:
- Rules drafted with industry input. The petition alleges an MCA company helped draft and edit the platform’s arbitration rules, which the state describes as asymmetrical in favor of claimants.
- Training that rejected merchant defenses. Arbitrators allegedly received sample awards that uniformly rejected defenses commonly raised by merchants.
- Pay that rewarded speed. Arbitrators were allegedly paid $50 to $75 for each uncontested matter.
- Near-total funder success. Nearly every matter ended with an award for the MCA claimant.
| Figure alleged in the petition (as of March 30, 2023) | Number |
|---|---|
| Total MCA arbitration matters | 2,760 |
| Uncontested matters (merchant did not appear) | 2,688 (97.4%) |
| Contested matters | 82 (2.6%) |
| Contested matters won by merchants | 1, attributed to a filing error by the claimant |
| Alleged arbitrator pay per uncontested matter | $50 to $75 |
The defendants have not been found liable for anything. They are entitled to contest the allegations, and the court will decide the case on the evidence.
Why Arbitration Became a Collection Tool
The petition connects the platform’s origins to a 2019 change in New York law. That year, New York amended CPLR § 3218 to bar confessions of judgment from being filed against defendants who do not reside in New York. Before the change, many MCA funders used confessions of judgment signed at funding to obtain quick judgments in New York courts against businesses located anywhere in the country. CredibleLaw’s guide to confessions of judgment explains how they work and where they remain enforceable.
The state alleges RapidRuling was designed to serve a similar function: a fast route to an enforceable award that could then be turned into a judgment. Arbitration clauses are common in MCA contracts, and many business owners sign them without noticing which forum is named or how disputes will be handled.
How an Arbitration Award Becomes a Judgment
An arbitration award is not, by itself, a court judgment. To enforce it, the winning party typically asks a court to confirm it. Under New York’s CPLR § 7510, “The court shall confirm an award upon application of a party made within one year after its delivery to them, unless the award is vacated or modified” on a recognized ground. Once confirmed, the award becomes a judgment that can be enforced like any other.
| Stage | What happens | What the business may see |
|---|---|---|
| Demand for arbitration | Funder files a claim with the arbitration provider named in the contract | Notice by mail or email, sometimes easy to miss or mistake for spam |
| Award | Arbitrator issues a decision, often by default if the business does not respond | A written award delivered by the provider |
| Petition to confirm | Funder asks a court to confirm the award, within one year of delivery under CPLR § 7510 | Court papers served on the business or its registered agent |
| Judgment | Court confirms the award and enters judgment | A judgment on court records |
| Enforcement | Funder uses post-judgment tools such as bank restraining notices and levies | A frozen or restrained business bank account |
Many owners first learn about an award at the last stage, when their bank account is restrained. CredibleLaw’s guide to unfreezing a business bank account covers what to do if that has already happened.
How to Find Out Whether an Award Exists Against Your Business
Business owners who signed an MCA with an arbitration clause, or who received unexplained notices from an arbitration service, can take several practical steps:
- Review your inbox, including spam and promotions folders. Online arbitration providers often send notices by email. Search for the funder’s name, “arbitration,” “award,” and “demand.”
- Check your registered agent’s records. Court papers for a petition to confirm are often served on a company’s registered agent rather than the owner directly.
- Search New York court filings. Petitions to confirm awards are filed as special proceedings in New York Supreme Court. Many can be searched by party name through the state’s electronic filing system, NYSCEF. Search your business’s exact legal name and any trade names.
- Review your MCA contracts. Note the arbitration provider, the location of any proceedings, the governing law, and the notice address the funder had on file.
- Watch for enforcement signs. A bank restraint, a levy, or a demand letter citing a judgment number can indicate that an award has already been confirmed.
- Request records through counsel. An attorney can request the arbitration file, the award, and proof of service.
If a funder has filed in court rather than in arbitration, CredibleLaw’s guide to merchant cash advance lawsuit defense covers how those cases typically proceed and how to respond.
Options for Challenging an Award
Whether an award can be challenged depends on timing, how the business was notified, the contract, and which law governs the arbitration. New York’s CPLR § 7511 provides the main framework in state court.
The 90-day window
Under CPLR § 7511(a), “An application to vacate or modify an award may be made by a party within ninety days after its delivery to him.” When the Federal Arbitration Act governs, 9 U.S.C. § 12 sets a similar three-month deadline for serving notice of a motion to vacate, modify, or correct. These deadlines are a major reason to act quickly once an award is discovered.
Grounds for vacating an award
For a party that participated in the arbitration or was served with a notice of intention to arbitrate, CPLR § 7511(b)(1) allows vacatur if the party’s rights were prejudiced by corruption, fraud, or misconduct in procuring the award; partiality of an arbitrator appointed as a neutral; an arbitrator exceeding their power; or a failure to follow required procedure.
For a party that neither participated nor was served with a notice of intention to arbitrate, CPLR § 7511(b)(2) adds further grounds, including that a valid agreement to arbitrate was not made, that the agreement to arbitrate was not complied with, or that the claim was time-barred.
Opposing confirmation
If a funder has filed a petition to confirm but the court has not yet ruled, the business may be able to oppose confirmation and raise grounds for vacatur in response. The petition in the Attorney General’s case notes instances in which courts partially vacated awards, particularly fee awards found to exceed an arbitrator’s authority.
After a judgment is entered
Once a judgment has been entered, the options narrow and depend heavily on the facts, including whether the business was properly served. Some owners may also have defenses to the underlying MCA, such as reconciliation failures or terms suggesting a disguised loan, that affect any settlement discussion. CredibleLaw’s overview of MCA legal defenses covers the issues attorneys typically evaluate.
| Your situation | Possible next step to discuss with an attorney |
|---|---|
| Received an arbitration demand, no award yet | Respond within the provider’s deadline; evaluate whether the arbitration clause is valid and whether to participate |
| Award delivered within the last 90 days | Evaluate a motion to vacate or modify under CPLR § 7511 or the FAA |
| Served with a petition to confirm | Evaluate opposing confirmation and raising grounds for vacatur |
| Judgment entered; account restrained | Address the restraint, review service and the judgment record, and assess negotiation or other relief |
| Unsure whether anything has been filed | Search court records and review notices before deadlines run |
What the Attorney General Is Asking the Court to Do
The petition, brought under New York Executive Law § 63(12) and General Business Law § 349, including the statute’s provision on abusive practices that took effect February 17, 2026, asks the court to:
- permanently bar the alleged fraudulent, deceptive, and abusive practices;
- dismiss, without prejudice, all pending MCA-related arbitrations on the platform;
- prohibit the defendants from providing services to the MCA industry;
- require an accounting of fees received from MCA companies;
- impose civil penalties of $5,000 per arbitration administered; and
- order restitution, damages, and disgorgement.
Two limits are worth understanding. First, a dismissal “without prejudice” generally means a funder could pursue its claim again in another forum. Second, the requested relief focuses on pending arbitrations, restitution, and penalties. Whether judgments already entered on confirmed awards could be revisited would likely depend on separate proceedings brought by the affected businesses. A business with an existing judgment should not assume the Attorney General’s case will undo it.
What Business Owners Can Do Now
- Check for awards and petitions, using the steps above, before any deadline passes.
- Read the dispute clause in every MCA contract you have signed, and note the named arbitration provider.
- Do not ignore an arbitration notice. Many awards in the petition’s statistics were entered because the business never appeared.
- Preserve every notice and email related to the funder and any arbitration provider.
- Follow the case. Court decisions in the Attorney General’s case may affect how similar awards are viewed.
- Talk to an attorney familiar with New York arbitration and MCA disputes. CredibleLaw’s page on New York MCA defense explains how disputes in the state typically proceed.
Frequently Asked Questions
What is the New York Attorney General’s lawsuit against RapidRuling about?
The Attorney General alleges that RapidRuling, an online arbitration service operated by Mediation and Civil Arbitration, Inc., presented itself as neutral while being designed to favor merchant cash advance funders. The petition was filed June 9, 2026, in New York County Supreme Court. The allegations have not been proven.
Has the court ruled in the RapidRuling case?
As of early October 2026, no ruling on the merits had been reported. The case remains pending.
How many MCA arbitrations does the petition describe?
The petition alleges 2,760 MCA arbitration matters as of March 30, 2023. Of those, 2,688, or 97.4%, were uncontested, and merchants prevailed in only one of 82 contested matters.
How do I know if an arbitration award was entered against my business?
Check email, including spam folders, for arbitration notices; review records from your registered agent; search New York court filings by your business’s legal name for petitions to confirm; and watch for bank restraints or letters citing a judgment.
How long do I have to challenge an arbitration award in New York?
Under CPLR § 7511(a), an application to vacate or modify an award may be made within 90 days after its delivery. If the Federal Arbitration Act applies, 9 U.S.C. § 12 requires notice of a motion to vacate within three months after the award is filed or delivered.
Can an award be vacated if my business never took part in the arbitration?
Possibly. Under CPLR § 7511(b)(2), a party that neither participated nor was served with a notice of intention to arbitrate may seek vacatur if, among other grounds, a valid agreement to arbitrate was not made or was not complied with.
Will the Attorney General’s case cancel judgments already entered against my business?
Not automatically. The relief requested focuses on pending arbitrations, restitution, and penalties. Revisiting an existing judgment would likely require separate action by the affected business.
Why do MCA funders use arbitration instead of confessions of judgment?
Since 2019, New York has barred filing confessions of judgment against defendants who do not reside in the state. Arbitration followed by a petition to confirm offers funders another route to an enforceable judgment.
Found an arbitration award or a frozen account you did not expect?
CredibleLaw can connect you with an independent attorney who handles MCA arbitration, judgments, and bank restraints.
Call 888-201-0441 Request a Case ReviewMore coverage: MCA defense attorney · Merchant cash advance news
Sources: Office of the New York State Attorney General, press release (June 8, 2026) and verified petition, People v. Mediation and Civil Arbitration, Inc., Index No. 452192/2026 (Sup. Ct. N.Y. County); N.Y. CPLR §§ 3218, 7510, 7511; 9 U.S.C. § 12.
CredibleLaw is a legal resource and attorney referral network, not a law firm, and does not provide legal advice. Use of this site does not create an attorney-client relationship. Attorneys in our network are independent. This article describes allegations in a pending lawsuit; no court has found the defendants liable. Deadlines and remedies depend on the specific contract, notice, governing law, and facts. Information reflects sources reviewed as of October 2026.