INFORM Consumers Act goes into effect today, ensures transparency in online retail marketplaces

Published 9:39 am Tuesday, June 27, 2023

WASHINGTON  U.S. Senators Bill Cassidy, M.D. (R-LA) and Dick Durbin (D-IL) released the following statement after their Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act went into effect today after being signed into law last year. The legislation combats the online sale of stolen, counterfeit, and dangerous consumer products by ensuring transparency in online retail marketplaces. It also directs online retail marketplaces that include third-party sellers of consumer products to verify the identity of “high-volume third-party sellers,” which will help deter the online sale of counterfeit goods by anonymous sellers and prevent organized retail crime rings from stealing items from stores to resell those items in bulk online.

“People deserve to know basic information about those who sell them consumer products online. By providing appropriate verification and transparency of high-volume third-party sellers, the INFORM Consumers Act will deter online sales of stolen, counterfeit, and unsafe goods and protect consumers. The bill is crucial to protecting Americans from scammers on the internet, and we’re thrilled our bipartisan legislation was implemented today,” said the senators.

The INFORM Consumers Act directs online marketplaces to verify high-volume third-party sellers by authenticating the seller’s government ID, tax ID, bank account information, and contact information. High-volume third-party sellers are defined as vendors who have made 200 or more discrete sales in a 12-month period amounting to $5,000 or more.

The legislation instructs online marketplaces to ensure that their high-volume third-party sellers disclose basic identity and contact information to consumers.

The online marketplaces will also need to supply a hotline to allow customers to report suspicious activity such as posting suspected stolen, counterfeit, or dangerous products. The bill presents an exception for individual high-volume third-party sellers that permits them not to have their personal street address or personal phone number revealed to the public if they respond to consumers’ questions over email within a reasonable timeframe. The bill’s requirements will be implemented by the Federal Trade Commission and violations will be subject to civil penalties.

Supporters of the INFORM Consumers Act include AFL-CIO, the U.S. Chamber of Commerce, the National Association of Manufacturers, the Fraternal Order of Police, the Buy Safe America Coalition (which includes the Retail Industry Leaders Association, the Alliance for Automotive Innovation, the Motor & Equipment Manufacturers Association, the National Association of Chain Drug Stores, the Toy Association, the National Association of Wholesaler-Distributers, the Consumer Healthcare Products Association, the International Council of Shopping Centers, the American Apparel & Footwear Association, The Home Depot, Walgreens, 3M, CVS Health, Nordstrom, Ulta Beauty, Dick’s Sporting Goods, Gap Inc., HP, Levi Strauss & Co., Phillips, Rite Aid, and more); the Coalition to Protect America’s Small Sellers (including eBay, Etsy, Poshmark, Pinterest, OfferUp, Redbubble, and more); Consumer Reports, U.S. PIRG, and more.