INFORM Act Aims To Uncover Online Counterfeit, Stolen Goods

In a new effort to deal with counterfeit, stolen and dangerous consumer products that emerge on e-commerce marketplace sites, U.S. Representative Jan Schakowsky of Illinois, chair of the House Consumer Protection and Commerce Subcommittee, has introduced legislation requiring verification of third-party sellers on e-commerce retail platforms.

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, Schakowsky’s office announced, directs online platforms that allow for third-party sellers of consumer products to authenticate their identity. In doing so, Schakowsky indicated, the bill will provide consumers with much-needed information and also help prevent organized retail crime operations. The bill also will ensure that consumers can see basic identification and contact information for high-volume marketplace third-party sellers.

The INFORM act directs online marketplaces to verify high-volume third-party sellers by acquiring their government ID, tax ID, bank account information and contact information. It defines high-volume third-party sellers 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 name, business address, email address and phone number to consumers, and whether the seller is a manufacturer, importer, retailer or reseller. In addition, the online marketplace will have to supply a hotline to allow customers to report suspicious marketplace activity such as the posting of suspected stolen, counterfeit or dangerous products.

Representative Kathy Castor is an original cosponsor of the House bill and U.S. Senators Dick Durbin and Bill Cassidy have introduced the Senate companion bill.

“While online marketplaces attract more and more consumers as a result of the pandemic, it’s critical for consumers to know who they are buying consumer products from,” Schakowsky said. “American manufacturers and retailers alike are fighting to survive as they compete with knock-off versions of their own products, sometimes appearing to be authentic, but lacking in quality or safety. It is critical for consumers and legitimate businesses to be protected from counterfeit, stolen, and dangerous products by requiring more transparency on online marketplaces. This bill is a commonsense, easy fix, and I hope for swift passage.”

Among statements backing the bill, Ulta Beauty CEO and Retail Industry Leaders Association chair Mary Dillon, stated, “Reducing retail crime is about much more than protecting our products from being stolen. Our employees and customers are put at risk when these crimes are committed in our stores. Minimizing these threats and protecting our people starts with making it harder to sell stolen goods online and it will be harder for criminals to sell online when the marketplaces increase their accountability by verifying basic information about the sellers. Ulta Beauty thanks Congresswoman Schakowsky for her leadership and strongly supports the INFORM consumers act.”

Walgreens president Alex Gourlay, said, “The lack of transparency and accountability in today’s digital marketplaces has contributed to the rapid rise of organized retail crime, which has become one of the top challenges facing the retail industry today. Walgreens strongly supports Congresswoman Schakowsky’s INFORM consumers act, which complements the bipartisan Senate bill introduced earlier this year to require online marketplaces to verify high-volume sellers, remove incentives for retail theft and help make our communities safer. Now, more than ever, consumers deserve to know who they are buying products from online, in order to make safe and informed purchasing decisions for themselves and their families.”