I too had one whose scrolling was constantly on-and-off right out of the box. The behaviour could sometimes be rectified only by pushing on the casing in certain places (around the bulged front under the buttons).
Having taken it apart to have a look, it's clear to me that this problem (which is evidently rife amongst arc touch users) is a hardware one; the scroll pad plugs into the circuit board through a thin ribbon cable. For me, the ribbon cable-to-plug itself
was the source of the problems; it's simply a very bad plug connection, and easily loses connection in places with the smallest change in tension on the ribbon cable. The cable itself is really just sort of bundled in there, so it's unsurprising that the connection
is constantly dodgy with all the casing flex that happens in normal use of the mouse.
Manually fixing the problem is not particularly easy, as getting a better contact with the cable is more a case of fiddling around with the plug, and is just as likely to make it worse as it is better. Mine is currently working after doing just this, but
I'm not sure for how long, and it certainly doesn't feel like a robust solution to the problem. In addition, the circuit board itself is badly designed, with a little dimple or led just in front of the plug connection, naturally forcing the ribbon cable to
take a zig-zag just beyond the connection.
I found a webpage online where someone has done a teardown and you can see the offending plug towards the
bottom of the second pictureand in the third picture.
So my impression: badly designed, badly manufactured, and not soluble through soft-or-firmware. Really not good enough for such an expensive product.