A new US law called the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act) will come into effect on June 27. The law aims to make it easier for consumers to contact online retailers and also make tax collection simpler. It will also provide more evidence of counterfeit products and receiving stolen goods.
The law primarily focuses on independent retailers who offer physical goods that are typically requested by consumers and are new or unused on online marketplaces for consumers. These retailers should be easily identifiable and accessible for customers and authorities. Online shops aimed at commercial customers are not affected by the law as long as they publish their name, address, and working means of contact.
The marketplace operator is also exempt from the law, even if they offer goods for sale. Similarly, manufacturers, wholesalers, or logisticians working on behalf of the marketplace operator are not affected. However, if an independent trader does not generally disclose their contact details, the operator must check if the trader is a “high-volume trader.”
A high-volume trader is defined as someone who has made at least 200 different transactions with new or unused consumer products in a twelve-month period within the last 24 months and has a total turnover of at least US$5,000. The marketplace operator must collect and verify the trader’s account data, tax number, name, physical address, email address, and telephone number within twenty days. The information must be reviewed at least once a year, and if the data collection or verification fails, the trader should be excluded from further trading within ten days.
If an affected merchant has gross sales of over $20,000 on the marketplace, their name, physical address, working phone number, and method of direct electronic communication for customers must be available. This data may appear with the products offered, in an order confirmation, or in a post-purchase communication. Traders who work from home can choose to only publish the country and, if necessary, the US state instead of their complete private address.
The law also requires marketplace operators to provide clear information about a reporting office for every product offered by an affected trader. This office should be accessible for people to report suspicious behavior by phone or electronically. The Federal Trade Commission (FTC) hopes that this will help identify counterfeit, unsafe, or stolen products, as well as other fraudulent activities. Violators of the law can face fines of up to $50,120 per violation imposed by the FTC. Individual US states may also sue marketplace operators and seek penalties and damages for residents.
Overall, the INFORM Consumers Act aims to improve consumer protection and make online retail marketplaces more transparent and accountable.
