This appeal arises from an order of the circuit court of St. Clair County denying themotion of DirecTV, Inc. (DirecTV), to stay proceedings in a class action suit and to compelarbitration. The motion was based upon the DirecTV "Customer Agreement" with plaintiff,Charlotte Bess. That agreement recites that any claim asserted by either party against theother, if not resolved informally, "will be resolved only by binding arbitration," to beconducted under the commercial arbitration rules of the American Arbitration Association. The court found the arbitration provision to be "substantively unconscionable andunenforceable" and denied DirecTV's motion to stay and to compel arbitration. DirecTVfiled a timely notice of interlocutory appeal. We have jurisdiction over the instant appealpursuant to Illinois Supreme Court Rule 307(a)(1) (188 Ill. 2d R. 307(a)(1)). See Caudle v.Sears, Roebuck & Co., 245 Ill. App. 3d 959, 962, 614 N.E.2d 1312, 1315 (1993).

DirecTV provides television programming services via satellite to consumersthroughout the nation. To obtain these services, a potential DirecTV subscriber typicallyfirst purchases from an independent retailer the equipment necessary to receive a satellitesignal. The potential customer then calls DirecTV and selects one or more of DirecTV'sprogramming packages. DirecTV then activates the subscriber's service and mails thecustomer a copy of the parties' written contract, entitled "Customer Agreement" (CustomerAgreement), along with his or her first bill. The Customer Agreement sets forth the parties'rights and obligations and explains the terms and conditions pursuant to which DirecTVprovides its service.

On November 28, 1999, Bess activated her DirecTV satellite programming service. The same day, DirecTV mailed to Bess a copy of the October 1999 Customer Agreement,along with her first billing statement. The Customer Agreement sets forth the terms of theagreement between DirecTV and its customers, including that DirecTV will send Bess abilling statement once every 30 days, that payment of the outstanding balance is due in fulleach month, and that if Bess's payment is not received by DirecTV before her next statementis issued, she may be charged an administrative late fee of up to $5. This administrative latefee is the subject of Bess's complaint.

The Customer Agreement contains informal and formal dispute-resolution clauses. Under the informal dispute-resolution clause, paragraph 8(a), the complaining party mustfirst notify the other of a claim at least 60 days in advance of starting any formal proceeding,so that an informal resolution of the claim can be attempted. Paragraph 8 of the CustomerAgreement provides that all disputes "relating to" the Customer Agreement or to DirecTVservices not resolved informally are to be submitted to binding arbitration. The arbitrationprovision, paragraph 8(b), states:

"Formal Resolution. Except as provided in Section 8(d), if we cannot resolve a Claiminformally, any Claim either of us asserts will be resolved only by binding arbitration. The arbitration will be conducted under the Commercial Arbitration Rules of theAmerican Arbitration Association that are in effect at the time the arbitration isinitiated (referred to as the 'AAA Rules') and under the rules set forth in thisAgreement. If there is a conflict between the AAA Rules and the rules set forth inthis Agreement, the rules set forth in this Agreement will govern. ARBITRATIONMEANS THAT YOU WAIVE YOUR RIGHT TO A JURY TRIAL. If youinitiate the arbitration, you agree to pay a fee of $125 or, if less and you tell us inwriting, the amount that you would pay to initiate a lawsuit against us in theappropriate court of law in your state. We agree to pay any additional fee or depositrequired by the American Arbitration Association in excess of your filing fee. Wealso agree to pay the costs of the arbitration proceeding up to a maximum of one-halfday (four hours) of hearings. Other fees, such as attorney's fees, expenses of travelto the arbitration[,] and the costs of a proceeding that goes beyond one-half day[,] willbe paid in accordance with the AAA Rules. The arbitration will be held at a locationwithin one hundred miles of your residence unless you and we both agree to anotherlocation."

The Customer Agreement also specified the method by which Bess could accept orrejects its terms:

"THIS DOCUMENT DESCRIBES THE TERMS AND CONDITIONSREGARDING YOUR RECEIPT AND PAYMENT OF DIRECTV SERVICE. IF YOU DO NOT ACCEPT THESE TERMS, PLEASE NOTIFY USIMMEDIATELY AND WE WILL CANCEL YOUR SERVICE. IF YOUAGREE, IT WILL MEAN THAT YOU ACCEPT THESE TERMS AND,ACCORDINGLY, THEY WILL BE LEGALLY BINDING ON YOU."

Bess did not cancel her service upon her receipt of the October 1999 Customer Agreementand, in fact, was still a DirecTV customer at the time of this appeal.

On November 22, 2000, Bess filed her first amended complaint in the circuit courtof St. Clair County. Her complaint alleges that DirecTV violated Illinois law by chargingits subscribers a $5 late fee when payments are not received on time. The gist of Bess'scomplaint is that DirecTV's true costs for late-paying customers are far below that chargedas a late fee. Bess argues that DirecTV's practice constitutes unjust enrichment and violatesboth Illinois common law concerning liquidated damages and the Illinois Consumer Fraudand Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2000)).

By letter dated December 4, 2000, DirecTV notified Bess that it intended to availitself of the parties' contractual dispute-resolution clause. On December 7, 2000, DirecTVmoved the court to compel arbitration and to stay Bess's action so that the arbitrationcontemplated by the parties' agreement could proceed. On March 27, 2003, the court deniedDirecTV's motion, concluding that the parties' arbitration agreement was unconscionable andunenforceable. In support of its decision, the trial court relied on the California case ofSzetela v. Discover Bank, 97 Cal. App. 4th 1094, 118 Cal. Rptr. 2d 862 (2002), which heldthat a provision in an arbitration agreement expressly prohibiting class actions violated publicpolicy.

Congress enacted the Federal Arbitration Act (FAA) (9 U.S.C.