The “INFORM Consumers Act” Would Require Online Shopping Sites to Verify Third-Party Sellers

WASHINGTON, D.C. — Ahead of the holiday shopping season, U.S. Representative Abigail Spanberger today voted to pass bipartisan legislation to protect Virginia consumers, prevent counterfeit or stolen goods from being sold online, and stop organized retail crime.

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act would combat the online sale of stolen, counterfeit, and dangerous consumer products by ensuring transparency of high-volume third-party sellers in online retail marketplaces. Specifically, the bill would direct online retail marketplaces that include third-party sellers of consumer products to verify the identity of “high-volume third-party sellers,” which would 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.

“As the number of Virginians shopping online increases, so do the threats of stolen, counterfeit, or hazardous products being sold as legitimate goods. To protect the purchases of consumers and make sure that their holiday deals aren’t too good to be true, we need to make sure that sellers are who they say they are,” said Spanberger. “The bipartisan INFORM Consumers Act would bring much-needed verification processes to the often-murky world of third-party sellers. Through this additional transparency, we can take baseline steps to make sure Virginians aren’t being ripped off as they shop online — and we can root out criminal organizations that are hawking fake or defective merchandise.”

The INFORM Consumers Act would direct online marketplaces — like eBay and Amazon — 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 to consumers basic identity and contact information. Additionally, online shopping sites would need to supply a hotline to allow customers to report to the marketplace suspicious activity. The bill’s requirements would be implemented by the FTC, and violations would be subject to civil penalties.

The INFORM Consumers Act is endorsed by a wide range of labor, business, and law enforcement groups. These organizations include the AFL-CIO, U.S. Chamber of Commerce, National Association of Manufacturers, National Fraternal Order of Police, Buy Safe America Coalition (which includes the Retail Industry Leaders Association, Alliance for Automotive Innovation, Motor & Equipment Manufacturers Association, National Association of Chain Drug Stores, Toy Association, National Association of Wholesaler-Distributers, Consumer Healthcare Products Association, International Council of Shopping Centers, 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); Coalition to Protect America’s Small Sellers (including eBay, Etsy, Poshmark, Pinterest, OfferUp, Redbubble, and more); Consumer Reports, and U.S. PIRG.

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