The false positive in this case is filing a false police report. That’s illegal in the US, and probably exposes the rental car company to civil liabilities (generally, contracts that allow one party to commit crimes are unenforceable, so I’d hope that extends to eliminating the binding arbitration clause, though I am not a lawyer).
The police should pursue it cases like this, and arrest the decision maker in the organization that caused this to happen. If it’s been happening repeatedly, the person’s sentence should be increased accordingly.