Starting June 27th, 2023, businesses in the United States will have to comply with a new law called the INFORM Consumers Act.

This law aims to provide transparency and protect consumers from online fraud by requiring businesses to disclose certain information about their sellers.

The INFORM Consumers Act requires online marketplaces to verify and disclose the identity of high-volume third-party sellers who do business on their platforms. Specifically, they must disclose the full name and address of each seller along with contact information such as phone numbers and email addresses. Additionally, marketplaces must collect tax identification numbers or social security numbers from all sellers that make more than $600 in sales per year.

The goal of this act is to prevent fraudulent activities that occur on online marketplaces. Currently, bad actors can create multiple accounts under different names and avoid detection while engaging in illegal or unethical practices such as selling counterfeit goods. By forcing marketplaces to reveal seller identities, it becomes easier for law enforcement agencies to track down fraudulent activity and hold those responsible accountable.

Businesses should start preparing for compliance now if they haven’t already done so. They need to ensure that they have processes in place for verifying seller identities and collecting necessary information. In addition, it’s important for businesses to communicate these changes with their sellers so they understand what’s expected of them moving forward.

The INFORM Consumers Act also mandates that sellers provide accurate descriptions of their products/services when listing them on an online marketplace. This includes disclosing any potential safety hazards associated with the product/service. Failure to accurately describe a product could result in financial penalties for both the seller and the marketplace.

While complying with this law may seem like a burden at first glance, it can actually benefit businesses in several ways. First, by increasing transparency and reducing fraud on online marketplaces, customer trust is likely to increase which can lead to increased sales over time. Second, by ensuring all sellers are verified before being allowed onto a marketplace, businesses can reduce the likelihood of counterfeit goods being sold which could negatively impact their own brand reputation.

In conclusion, the INFORM Consumers Act is an important step towards protecting consumers from online fraud and ensuring transparency in online marketplaces. Businesses that sell on these platforms need to take this law seriously and ensure they are compliant by June 27th. By doing so, they not only protect themselves from potential financial penalties but also improve customer trust and loyalty over time.