{"id":30711,"date":"2023-03-06T06:00:00","date_gmt":"2023-03-06T06:00:00","guid":{"rendered":"https:\/\/www.trulioo.com\/blog\/"},"modified":"2023-07-26T23:34:28","modified_gmt":"2023-07-26T23:34:28","slug":"inform-consumers-act","status":"publish","type":"post","link":"https:\/\/www.trulioo.com\/blog\/marketplaces\/inform-consumers-act","title":{"rendered":"INFORM Consumers Act Brings New Regulatory Oversight to Online Marketplaces"},"content":{"rendered":"\n

Online retail marketplaces<\/a> in the U.S. will have to collect, verify and disclose certain information from \u201chigh-volume\u201d third-party sellers under a new regulatory requirement. <\/p>\n\n\n\n

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, or the INFORM Consumers Act<\/a>, goes into effect June 27, 2023. It requires online marketplaces collect information from third-party sellers within 10 days of their obtaining \u201chigh-volume\u201d status, which is conducting 200 or more transactions resulting in total revenue of $5,000 or more during a continuous 12-month period. <\/p>\n\n\n\n

Online marketplaces then have 10 days to verify the seller information, which, according to the act, \u201cmay include the use of one or more methods that enable the online marketplace to reliably determine that any information and documents provided are valid, corresponding to the seller or an individual acting on the seller\u2019s behalf, not misappropriated, and not falsified.\u201d<\/p>\n\n\n\n

The act, which was introduced in 2020 and signed into law as part of the Consolidated Appropriations Act of 2023, civil penalties of up to nearly $50,000 per violation for online marketplaces. The U.S. Federal Trade Commission will enforce the act, and attorneys general in the states where people are affected may also bring civil actions.<\/p>\n\n\n\n

\u201cBy providing appropriate verification and transparency<\/a> of high-volume third party sellers,\u201d act sponsor U.S. Sen. Dick Durbin, D-IL, said, \u201cthe INFORM Consumers Act will shine a light that will deter online sales of stolen, counterfeit, and unsafe goods and protect consumers.\u201d <\/p>\n\n\n\n

Collecting and Verifying Seller Information<\/h2>\n\n\n\n

The act requires online marketplaces gather such information as:
<\/p>\n\n\n\n

Seller bank account<\/strong> numbers \u2014<\/strong> If sellers don\u2019t have an account number, online marketplaces gather the name of the payee. The information can come directly from the seller or from a third party, such as a payment processor, if it can be collected within three business days.<\/p>\n\n\n\n

Seller or business information \u2014 <\/strong>That includes the seller\u2019s name and related information. If it\u2019s a business, the online marketplace obtains an ID copy of the person acting on behalf of the business, a business record or a tax document with the business name and address.<\/p>\n\n\n\n

Tax ID \u2014<\/strong> That includes a business or taxpayer identification number(s).<\/p>\n\n\n\n

Email and phone number \u2014 <\/strong>Online marketplaces must have a current, working email address and phone number for the seller
<\/p>\n\n\n\n

If online marketplaces don\u2019t receive the information within 10 days of \u201chigh-volume\u201d status, they must suspend the seller. Marketplaces also must contact those sellers at least annually to verify the information is accurate and up to date.<\/p>\n\n\n\n

Disclosing Seller Information<\/h2>\n\n\n\n

The act also requires marketplaces clearly share with consumers information about \u201chigh-volume\u201d sellers with annual gross revenue of $20,000 or more. That information includes:<\/p>\n\n\n\n