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  • Writer's picturePaul Peter Nicolai

INFORM Consumers Act Requires Verified Unauthorized Third-Party Seller Information

Updated: Jun 16, 2023

Anonymous unauthorized third-party sellers are a nagging problem for most brands. Although some online marketplaces have taken steps to increase transparency, like mandating that third-party sellers disclose their business names and addresses on their profiles, unauthorized resellers often use UPS drop-box locations, shell companies, fake addresses, and other deceptive information to remain anonymous.


The recently passed Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Act) is a step in the fight against unauthorized third-party resellers who hide behind the anonymity afforded by Internet marketplaces. Effective in late June 2023, online marketplaces will be required to collect and verify the contact information for high-volume sellers listed on the marketplace.


The INFORM Act will provide more verified seller contact information on Internet marketplaces and offer another tool for brands to combat third-party sellers who provide misleading or otherwise fraudulent contact information to avoid repercussions for their unauthorized sales.


The INFORM Act requires online marketplaces to collect and verify information from high-volume, third-party sellers. While it does not apply to every seller on Internet marketplaces, it likely applies to most sellers that pose issues for brands. A high-volume, third-party seller is defined as a seller who, in any 12 months in the past two years, has made over 200 sales that total $5,000 or more. There is an exception for sellers who have made the required information publicly available and have an ongoing contractual relationship with the online marketplace.


The INFORM Act requires high-volume, third-party sellers on online marketplaces to provide the marketplace with the seller’s (1) bank account number, (2) contact information, and (3) certain tax identification information within ten days of becoming a high-volume seller.


Once the correct information is collected, the online marketplace must require any high-volume, third-party seller with an aggregate total of $20,000 or more in annual gross revenue to disclose certain information to consumers on the product listing page or the order confirmation message. Consumers must provide the full entity name, a physical address, and other contact information.


The marketplace must verify that the information collected is true and accurate within ten days of receiving it. The online marketplace must annually notify and require sellers to certify that the information is still accurate. If a high-volume, third-party seller does not provide the information or certification, the online marketplace must suspend future sales activity until the seller provides the appropriate information or verification.


Although this law was passed to protect consumers, manufacturers will also benefit. Brands can more easily access the contact information of problematic, high-volume, unauthorized third-party sellers on online marketplaces. The availability of an online seller’s contact information will help to streamline the enforcement of authorized reseller programs.


The INFORM Act does not mean the end of unauthorized third-party resellers. What it does mean is that brands will have more verified transparency.


The INFORM Act also offers brands another tool to combat and remove unauthorized third-party sellers. Where a seller fails to provide a verifiable address or does not certify that the information is correct as required by the INFORM Act, the Internet marketplace must suspend or shut down the seller. Brands discovering false or otherwise misleading seller information can report this to the marketplace to remove anonymous unauthorized resellers.



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