If you are not careful, it can be hard to tell if a product is authentic, especially when you are shopping online and you can only trust reviews and a picture.
In an effort to increase transparency on online marketplaces and cut down on the sale of counterfeit and stolen items, in 2022 Congress passed the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act – or the INFORM Consumers Act.
"The sale of counterfeit goods online impacts national economies, companies of all sizes, and consumers and has exploded in the past decade, even more so since COVID-19,” says Kari Kammel with the Center for Anti-Counterfeiting and Product Protection at Michigan State University.
The INFORM Consumers Act requires online marketplaces to get more information from third-party sellers, particularly ones that have a high volume of business.
The law says a "high-volume third-party seller" is someone who, in any 12-month period over the last two years, has had 200 or more separate sales totaling more than $5,000.
“Hey, marketplaces [like] Amazon [and] Facebook. If you have a high-volume seller, make sure that you know who they are. Let's verify those sellers and make sure that consumers have the ability to see who they're buying from,” she says.
The law comes after retailers lobbied Congress noting more retail theft, especially during the COVID-19 pandemic, and asking for more regulations.
Effective June 27, 2023, high-volume sellers have to verify their bank account, contact, and tax ID information.
The Federal Trade Commission says the marketplace must verify the information within 10 days or face a $50,000 fine.
While this is a big step for consumers, it likely will not stop all online sales of counterfeit items. The advocacy group Consumers’ Checkbook offers this advice to protect yourself and your money:
- Compare prices across all marketplaces
- Beware of any super-low deals
- Research the seller to see where else they list products
- Scrutinize labels and products
For transparency, sites like eBay and Amazon also have disclosures about the law on their websites.
Counterfeit items can hurt consumers and legitimate retailers, so if you suspect an online seller is violating the INFORM Consumers Act, report it to the FTC here.
