Bill Introduced to Ensure Transparency for Third-Party Sellers of Online Product Sales
The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM) Act would mandate online retail marketplaces that include third-party sellers of consumer products to authenticate the identity of “high-volume third-party sellers,” which will help equalize transparency among brick-and-mortar retailers and prevent organized retail crime rings from stealing items from these stores to resell those items in bulk online.
“Criminal third-party sellers trick consumers into buying counterfeit and hazardous products online. This bipartisan bill provides information so that consumers can distinguish between genuine retailers and frauds in the internet marketplace,” said Dr. Cassidy.
The INFORM Consumers Act will verify high-volume third-party sellers by acquiring 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 order their high-volume third-party sellers to disclose to consumers the seller’s name, business address, email address, phone number and whether the seller is a manufacturer, importer, retailer or a reseller of consumer products.
The online marketplace will also need to supply a hotline to allow customers to report to the marketplace suspicious marketplace activity. 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 would be implemented by the FTC and violations would be subject to civil penalties.
The INFORM Consumers Act has received support from the Household & Commercial Products Association, U.S. Public Interest Research Group, Public Citizen, Retail Industry Leaders Association, Louisiana Retailers Association, Toy Association, TIC Council, Juvenile Products Manufacturers Association, Halloween & Costume Association and The Home Depot.
“We’re pleased to see the U.S. Senate work toward keeping online marketplaces accountable for the products sold on their platforms which will prevent criminals from selling counterfeit and stolen goods to unsuspecting customers,” said Scott Glenn, Vice President of Asset Protection for The Home Depot.
