INFORM Consumers Act Implementation Looms - Is Your eCommerce Enterprise Prepared?

By R.J., Miami Criminal Defense Attorney - June 8, 2023

Navigating eCommerce Landscape

As we navigate through the ever-evolving eCommerce landscape, a new federal law is on the horizon that will significantly affect the way online marketplaces operate. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, more commonly referred to as the INFORM Consumers Act, will come into effect on June 27, 2023. This law aims to bring increased transparency to online transactions and deter the sale of stolen, counterfeit, or unsafe items through online marketplaces. As an online business owner, it's essential to understand what this means for your operations and what steps you should take to ensure compliance.

What is the INFORM Consumers Act?

The INFORM Consumers Act is a federal law designed to ensure more transparency in online transactions. It requires online marketplaces to collect and verify specific financial and identifying information from "high-volume third-party sellers". These sellers are defined as businesses or individuals who meet specific sales thresholds on the platform. The law also requires the disclosure of the seller's name, address, and contact information on product listing pages or in order confirmation messages and account transaction histories. Online marketplaces must suspend high-volume third-party sellers who fail to provide the required information. Additionally, they must provide an easily accessible reporting mechanism for consumers to flag suspicious conduct.

How to Prepare for the INFORM Consumers Act

​Identify if the law applies to you: The law primarily affects online marketplaces and high-volume third-party sellers operating in the United States. If your business falls under this category, you need to pay attention to the upcoming changes.

Understand the information required: If you're a high-volume third-party seller, you'll need to provide specific financial and identifying information. Ensure you understand what these are and how to provide them accurately.

Establish robust verification processes: Online marketplaces will need to have systems in place to verify the information provided by high-volume third-party sellers.

Develop clear consumer reporting mechanisms: Make sure your platform offers an easily accessible method for customers to report suspicious behavior.

Prepare for compliance checks: The Federal Trade Commission (FTC) will monitor adherence to the INFORM Consumers Act. Businesses that don't comply with these requirements could face civil penalties and other legal consequences.

With the June 27, 2023, effective date on the horizon, now is the time for online marketplaces and third-party sellers to begin their compliance efforts. The INFORM Consumers Act will bring about significant changes to the way we do business online. By preparing now, your business can navigate these changes successfully and continue to thrive in the eCommerce world.

For more updates and advice on legal developments affecting your online business, stay connected with us at the Miami Criminal Defense Attorney Dennis Gonzalez's blog.

Disclaimer: This blog post is meant for informational purposes only and does not constitute legal advice. For specific questions or concerns, consult with a legal professional.