New transparency rules for third-party online marketplace sellers to take effect

Thieves may soon have a harder time selling stolen or counterfeit items online.

Starting on Tuesday, June 27, a new law takes effect that aims to improve transparency of high-volume third-party sellers on online marketplaces like Amazon and Facebook so that customers know more about who they are buying from before they click purchase.

The changes are part of the law known as the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, or the INFORM Consumers Act.

It requires online marketplaces to collect and verify financial information for certain third-party sellers and it requires some sellers to provide their contact information to customers so shoppers can contact them directly.

Rebecca Goff has a business that acts as a third-party seller online called Native Teaching Aids.

“We work with Native American tribes across North America and so we make language games, card games, board games, history timeline games from an indigenous perspective,” said Goff.

Goff said she welcomes the changes under the new law because her business has run into issues with outsiders from other countries reselling their items without permission.

“Because we collaborate with Native American tribes and First Nations, we try to guarantee as much as possible that everything is coming from us and getting out there and selling and they get portions back,” said Goff. “The way third-party sellers that would take our products out of the country and do it that way, would really dissolve all of that… So, being transparent also protects us as much as the consumer.”

Consumer advocacy groups like the U.S. Public Interest Research Group (PIRG) say improved transparency will help all parties.

“Cutting down on counterfeits and stolen goods for sale online helps consumers, helps businesses. It helps everybody,” said Teresa Murray, a consumer watchdog for U.S. PIRG. “We actually should see fewer product listings on some of these secondary seller websites and that’s a good thing. Consumers might think oh gosh it’s more difficult to find this thing, but that could actually be beneficial because that means that the fake products, the counterfeit products and the stolen products are not online.”

The changes only apply to high-volume third-party sellers, so that generally means businesses with more than 200 sales a year and one that makes at least $5,000 in profits a year.

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