Business Blog
Online marketplaces, take note: INFORM Consumers Act takes effect on June 27th
The INFORM Consumers Act is effective as of June 27, 2023. Online marketplaces, have you taken the steps the statute requires? And is your site ready for scrutiny by the FTC and state law enforcers?
The INFORM Consumers Act requires “online marketplaces” – a term defined in the statute – to protect consumers from counterfeit, unsafe, and stolen goods by verifying the identity of high-volume third-party sellers on their platforms and by making it easier for consumers to report suspicious conduct.
Last week FTC staff sent letters to 50 online marketplaces across the country calling attention to their obligation to comply with the new law. Whether or not your business received one of those letters, if you meet the statutory definition of an online marketplace, you need to be in full compliance with the INFORM Consumers Act by June 27th. FTC staff also urge online marketplaces to communicate with their third-party sellers about the information the law requires marketplaces to collect, verify, and disclose about them.
A new FTC publication, Informing Businesses About the INFORM Consumers Act, offers compliance basics. If you spot a possible violation of the law, report it to the FTC.
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I have concerns regarding the lack of clarity between verified and non-verified reviews on well-known shopping platforms. As a frequent buyer, I have recently discovered that distinguishing between these two types of reviews is not as straightforward as it should be. This issue is of great relevance to consumer protection laws, and I would like to bring it to your attention for further investigation.
Throughout my time as a customer, I, like many others, held the assumption that all reviews on the platform were verified. However, after spending a considerable amount of time navigating the user interface and researching the matter, I realized that some well-known shopping website eonly verifies certain reviews while leaving others unverified. This discrepancy poses a significant challenge for consumers seeking trustworthy information to make informed purchasing decisions.
According to consumer law, it is crucial for verified reviews to be easily distinguishable from non-verified ones. The absence of clear and distinct visual indicators or any outstanding visible features for verified reviews undermines the purpose of verification. As a result, it becomes increasingly difficult for consumers to rely on the authenticity and reliability of product reviews when assessing the quality and suitability of a particular item.
In order to ensure transparency and uphold consumer rights, it is imperative that FTC takes immediate action to rectify this issue. I strongly urge those online shopping giants to review and revise the current system in place for identifying verified reviews, making them readily identifiable to customers during their browsing and purchasing experiences on the platform.
By enhancing the visibility of verified reviews, and remove non verfied reviews, the FTC would empower consumers to make more informed decisions, fostering a fair marketplace where reliable and trustworthy feedback holds greater significance. This would not only benefit customers but also contribute to the overall reputation and integrity of shopping platforms as a reputable online retailers.
I appreciate your attention to this matter and kindly request that you initiate an investigation into the discrepancy between verified and non-verified reviews onthose sites,. I trust that you will take the necessary steps to address this issue and ensure compliance with consumer protection laws.
This may even create new jobs to verify, sort out and clean up
This is a HORRIBLE law that has no recourse for Valid Sellers who are having issues being verified due to technical issues with Amazon.
I'm a single Dad with teenage kids and this terrible legislation is about to deny me a $4K payment from Amazon because of some stupid technical glitch in the approval process!
What recourse do vendors have to be PROTECTED?
At first I thought this law was a great idea to clear out the marketplaces from illegitimate sellers but this is proving to be a DISASTROUS bill written without recourse for those about be be smashed under it's beaurocratic idiocy - thanks Dick Durbin (D-IL) and Bill Cassidy (R-LA) for FAILING your constituents and the Small Businesses of America by creating such a relentlessly stupid bill that is all enforcement and no reprieve for businesses who recently moved and have our information split between different addresses and accounts.
I'm typically a generous donor around election time but I can't stand by and watch my account be demolished and all my hard work evaporate without calling out the oblique naivety and non-business friendly stance of this atrocious bill.
Shame on Durbin and Cassidy for failing the small businesses of America so horribly.
Terrence Kelleman, Amazon Seller, Small business owner for 20 years and inventor of products sold around the world but most importantly single Dad to two amazing teenagers.
Facebook marketplace is always riddled with the same ads but different locations. I mean, identical information, except for location and seller information. Especially in the auto section of Facebook Marketplace.
This is a significant step forward in consumer protection. The INFORM Consumers Act's implementation is crucial to ensure online marketplaces prioritize consumer safety. Verifying high-volume third-party sellers' identities and enhancing reporting mechanisms for suspicious conduct will undoubtedly enhance trust in online transactions. The FTC's proactive approach by sending compliance reminders to online marketplaces demonstrates their commitment to enforcement. All online marketplaces, whether or not they received the letters, should prioritize compliance by June 27th. Open communication between marketplaces and third-party sellers about required information is essential for seamless implementation. The availability of the FTC publication "Informing Businesses About the INFORM Consumers Act" provides a valuable resource for understanding compliance requirements. Kudos to the FTC for their efforts in safeguarding online consumers and encouraging vigilance through potential violation reporting.