How the INFORM Consumers Act Affects E-Commerce Sites
How the INFORM Consumers Act Affects E-Commerce Sites
- posted: Sep. 24, 2025
- E-Commerce
As the operator of an online business, you need to understand the INFORM Consumers Act, a federal law that took effect in 2023. It was enacted primarily to combat organized retail crime, which leverages the anonymity of online marketplaces to sell stolen and counterfeit goods. It imposes new transparency requirements that can directly impact your operation.
The INFORM Act requires you to focus on your "high-volume third-party sellers." It is mandatory to identify any seller on your platform who, over a continuous 12-month period within the last two years, has made 200 or more separate sales of new or unused products that amount to $5,000 or more in gross revenue. You must have a reliable system in place to track these metrics for every seller account.
For every seller who meets this threshold, you are required to collect, verify, and secure their crucial information. This means you must obtain and validate a bank account number, a government-issued ID, a tax identification number, and working contact details. The verification process is not a one-time event; you must also have sellers certify their information as accurate on an annual basis. Given the sensitivity of this data, you must ensure your data security protocols are robust enough to protect it from breaches, as you are the custodian of this information.
Your responsibilities also extend to public disclosure. If any of your high-volume sellers reaches an annual gross revenue of $20,000, you are required to display their full name and physical address to customers, either on the product listing itself or in the order confirmation message. The law provides a privacy exception for sellers operating from a residential address; they can request that you display only their state and country. However, you must still collect the full address for your records. Be aware that non-compliance is taken seriously, with potential fines of up to $50,000 per violation.
These rules are meant to give your customers a safer, more transparent shopping experience. By letting buyers see who they are really purchasing from, you empower them to make more informed decisions and build trust in your platform. You must also provide your customers with a clear, conspicuous and readily accessible way to report any suspicious activity, such as a prominent link on product pages.
A dedicated e-commerce and Internet lawyer can advise you of how to manage the administrative burden of compliance with INFORM. This includes actively weeding out bad actors and fostering a transparent environment, allowing you to enhance your brand's reputation for safety and reliability.
Andrew M. Jaffe, Attorney at Law advises businesses on all aspects of compliance with federal, state and international e-commerce regulations. Please feel free to call me at 330-845-6027 or contact my office through email at [email protected] to arrange a free, no obligation consultation.
How the INFORM Consumers Act Affects E-Commerce Sites
- posted: Sep. 24, 2025
- E-Commerce
As the operator of an online business, you need to understand the INFORM Consumers Act, a federal law that took effect in 2023. It was enacted primarily to combat organized retail crime, which leverages the anonymity of online marketplaces to sell stolen and counterfeit goods. It imposes new transparency requirements that can directly impact your operation.
The INFORM Act requires you to focus on your "high-volume third-party sellers." It is mandatory to identify any seller on your platform who, over a continuous 12-month period within the last two years, has made 200 or more separate sales of new or unused products that amount to $5,000 or more in gross revenue. You must have a reliable system in place to track these metrics for every seller account.
For every seller who meets this threshold, you are required to collect, verify, and secure their crucial information. This means you must obtain and validate a bank account number, a government-issued ID, a tax identification number, and working contact details. The verification process is not a one-time event; you must also have sellers certify their information as accurate on an annual basis. Given the sensitivity of this data, you must ensure your data security protocols are robust enough to protect it from breaches, as you are the custodian of this information.
Your responsibilities also extend to public disclosure. If any of your high-volume sellers reaches an annual gross revenue of $20,000, you are required to display their full name and physical address to customers, either on the product listing itself or in the order confirmation message. The law provides a privacy exception for sellers operating from a residential address; they can request that you display only their state and country. However, you must still collect the full address for your records. Be aware that non-compliance is taken seriously, with potential fines of up to $50,000 per violation.
These rules are meant to give your customers a safer, more transparent shopping experience. By letting buyers see who they are really purchasing from, you empower them to make more informed decisions and build trust in your platform. You must also provide your customers with a clear, conspicuous and readily accessible way to report any suspicious activity, such as a prominent link on product pages.
A dedicated e-commerce and Internet lawyer can advise you of how to manage the administrative burden of compliance with INFORM. This includes actively weeding out bad actors and fostering a transparent environment, allowing you to enhance your brand's reputation for safety and reliability.
Andrew M. Jaffe, Attorney at Law advises businesses on all aspects of compliance with federal, state and international e-commerce regulations. Please feel free to call me at 330-845-6027 or contact my office through email at [email protected] to arrange a free, no obligation consultation.
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