Grassley Joins Bipartisan Effort to Ensure Greater Transparency for Third-Party Sellers of Consumer Products Online

WASHINGTON – U.S. Senator Chuck Grassley (R-Iowa) today joined Senators Dick Durbin (D-Ill.), Bill Cassidy, M.D. (R-La.) and others to introduce legislation to combat the online sale of stolen, counterfeit, and dangerous consumer products by ensuring transparency of high-volume third-party sellers in online retail marketplaces. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act would direct online retail marketplaces that include third-party sellers of consumer products to authenticate the identity of “high-volume third-party sellers,” which will help deter the online sale of counterfeit goods by anonymous sellers and prevent organized retail crime rings from stealing items from stores to resell those items in bulk online. The bill will also ensure that consumers can see basic identification and contact information for high-volume third party sellers of consumer products on online marketplaces. The bill is cosponsored by Sens. Mazie K. Hirono (D-Hawaii), Chris Coons (D-Del.) and Thom Tillis (R-N.C.).

 

In 2019, as chairman of the Senate Finance Committee, Grassley released a bipartisan report on economic and safety risks posed by counterfeit goods sold online.

 

“Online shoppers deserve to have confidence that they’re getting exactly what they’re paying for, but all too often, fraudsters and thieves take advantage of unsuspecting consumers to offload their ill-gotten inventory. This bill helps provide better verification and greater transparency of online marketplace practices so consumers can trust that the products they purchase are legitimate and sold by legitimate vendors,” Grassley said.

 

“People deserve to know basic information about those who sell them consumer products online. Our bill ensures a baseline level of transparency for online marketplaces, where currently it may be difficult to know who third-party sellers are and how to contact them. The INFORM Consumers Act will help promote responsible marketplace behavior, discourage shadowy sales practices, and protect consumers,” said Durbin.

 

“Criminal organizations are attempting to trick consumers into buying counterfeit and hazardous products online. This bipartisan bill provides transparency and necessary information for consumers to distinguish between genuine retailers and frauds in the internet marketplace,” said Dr. Cassidy.

 

“People shouldn’t have to guess where the products they buy online come from or whether they are counterfeit. The INFORM Consumers Act helps consumers make informed decisions by providing them with critical information about third-party sellers, which would help keep Americans safe and healthy,” said Hirono.

 

“Counterfeit goods pose health and safety risks, damage the reputations of legitimate brands, and line the pockets of organized crime,” said Coons. “I am proud to cosponsor this bill that’s an important step towards transparency and accountability for third-party sellers who take advantage of American consumers’ trust in established online marketplaces.”

 

“Over the last year, Americans have turned to online marketplaces to purchase what they need on a day-to-day basis, especially the elderly who are more at risk and often cannot go to their local store like normal,” said Tillis. “Unfortunately, criminal actors, often from China, are taking advantage of this pandemic to sell dangerous counterfeit goods to unsuspecting Americans. I appreciate the proactive steps some companies have taken to prevent the sale of counterfeits and I am proud to work with my colleagues on both sides of the aisle to ensure safety and transparency in the online retail marketplace.”

 

The INFORM Consumers Act directs online marketplaces to verify high-volume third-party sellers by acquiring the seller’s government ID, tax ID, bank account information, and contact information. High-volume third-party sellers are defined as vendors who have made 200 or more discrete sales in a 12-month period amounting to $5,000 or more.

 

The legislation instructs online marketplaces to ensure that their high-volume third-party sellers disclose to consumers basic information including the seller’s name, business address, email address, phone number.

 

The online marketplace will also need to supply a hotline to allow customers to report to the marketplace suspicious marketplace activity such as the posting of suspected stolen, counterfeit, or dangerous products. The bill presents an exception for individual high-volume third-party sellers that permits them not to have their personal street address or personal phone number revealed to the public if they respond to consumers’ questions over email within a reasonable timeframe. The bill’s requirements would be implemented by the FTC and violations would be subject to civil penalties.

 

The INFORM Consumers Act has received support from the following organizations: 3M, Automotive Anti-Counterfeiting Council, Association of Home Appliance Manufacturers, American Apparel & Footwear Association, Consumer Healthcare Products Council, Coalition of Law Enforcement and Retail, CVS Health, Juvenile Product Manufacturers Association, The Home Depot, International Council of Shopping Centers, Levi Strauss & Co., Lowe’s, National Association of Chain Drug Stores, National Association of Wholesaler-Distributors, OpSec Security, Personal Care Products Council, Philips, Power Tool Institute, Inc., Plumbing Manufacturers International, Retail Industry Leaders Association, Rite Aid, The Fashion Jewelry & Accessories Trade Association, The Toy Association, Ulta Beauty, Walgreens, Public Citizen, and U.S. PIRG.