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Background of the Law
The INFORM Consumers Act takes two major actions to safeguard consumers from "high-volume third party sellers," users who are: (1) independent of the owner/operator of the online marketplace (i.e. Amazon, eBay, Redbubble, or TeePublic), and (2) entered into 200 or more sales of new or unused consumer products resulting in revenues of $5,000.00 or higher.
The first major action is the implementation of a requirement for an online marketplace to require high-volume third party sellers to provide the following information:
- A verified bank account information,
- A government-issued identification for the individual representing the high-volume third party seller,
- A government-issued record verifying that information, and
- A business tax identification number.
The second major action entails requiring the online marketplace to post identifying information associated with the high-volume third party seller on the pages for their listings. This information shall include the seller's full name, business address, whether the seller engages in manufacturing, importing, retail or resale, and contact information for the seller, including a phone number and working email address. Further, while this is not a major step forward, contact information for reporting suspicious activity, in addition to other information that the Federal Trade Commission deems appropriate. This should assist consumers in not only contacting retailers directly concerning defective goods, but also being able to better calculate their purchase (i.e. avoiding resellers if an unopened/new item is needed). Further, for other retailers, this may assist them in directly contacting the high-volume third party seller to issue cease and desist notices if items are counterfeit or otherwise infringe on the retailer's registered trademarks.
While there are some exceptions to the latter requirement concerning the High-Volume Third Party Seller, sellers can request a reduction in the partial disclosure of information, specifically in cases where (a) they only have a personal street address; and (b) do not have a business number and only have a personal number. Nonetheless, this does create a defacto email address that must be set up and maintained by the third party seller, and if an online marketplace becomes aware that a false representation was made for the sole purpose of reducing the amount of information being provided, such online marketplace can demand full disclosure of information.
What the INFORM Consumers Act means for You
If passed, the INFORM Consumers Act will have three general effects on retailers. First, for businesses that sell on Amazon or via e-Bay, businesses should be prepared to share further information with those online marketplaces and verify their identity in order to continue doing business. Second, businesses that are still operating informally from a personal address may need to consult attorneys to protect their personal addresses and information. Third, as stated above, enforcement of trademarks or copyright may become much easier, as a trademark or copyright owner could send cease and desist letters to either a verified address or a valid email.
It references to NEW and INUSED Items
