E-commerce and direct-to-consumer (“DTC”) businesses should be aware of the requirements of the federal Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act enacted by Congress in 2023. The Act is called the INFORM Consumers Act. Many e-commerce and DTC businesses already comply with the Act, either because the required information is supplied as part of ordinary business practices or because online sales platforms changed their Terms of Service to require the provision of the information. However, new e-commerce and DTC entrepreneurs should be prepared to comply with the INFORM Consumers Act. Confirming compliance is another one of those due diligence requirements when considering an e-commerce merger and/or acquisition. Here are a few things to know about the INFORM Consumers Act.

What information must be supplied?

The INFORM Consumers Act requires online sellers to provide basic contact information, which, in some cases, must then be disclosed to consumers through the online sales platform/marketplace. One purpose is to ensure that consumers have contact information for online sellers, allowing for “direct and unhindered communication” to inhibit fraud and deceit. Another underlying purpose of the Act is to assist in the collection of contact and financial information in the event of lawsuits, judgments, and/or fines to help prevent counterfeiting, piracy, and other illegal business practices. Thus, the basic information that must be disclosed to an online sales platform/marketplace is:

• Name (if selling as an individual) OR
• Business name and name of an individual acting on behalf of the business AND some form of valid government-issued identification for that individual OR a valid tax document that includes the business name and physical address of the seller
• Valid and working email address
• Valid and working phone number
• Physical street address
• Seller’s taxpayer identification number
• Seller’s Bank account information

What information will be disclosed to consumers?

For some sales listings, the online sales platform is required to provide some of this information to consumers (as part of the listing). This information includes Seller’s:

• Full name
• Physical address
• Contact information such as phone number, email address, etc.
• If a different business is used to supply the product being sold, that must be disclosed and, upon request, the name, address, and contact information for that business must be provided to the consumer

Does the INFORM Consumers Act apply to my e-commerce business?

Maybe. That Act applies to “third-party sellers” with “high volume.” “Third-party” basically means that the seller does not own the online sales platform/marketplace. “High volume” means a seller that has had 200+ separate sales and $5,000+ in gross revenues during any continuous 12-month period in the previous 24 months. The Act also only applies to sellers of “consumer” goods and products.

What if an e-commerce business does not comply?

If an e-commerce business does not comply with the requirements of the INFORM Consumers Act, the online sales platform/marketplace is required to suspend the seller’s account. For many sellers that is the harshest possible punishment.

Contact the Internet Law and E-commerce Attorneys At Revision Legal

For more information, contact the experienced Internet Law and E-commerce Merger & Acquisition Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.

The FTC’s Role and How the INFORM Act Gets Enforced

The INFORM Consumers Act is enforced primarily by the Federal Trade Commission under its existing authority to regulate unfair or deceptive acts and practices. The FTC can bring civil penalty actions against online marketplaces that fail to collect and verify required seller information, and against individual sellers who provide false information to a marketplace. Civil penalties under FTC enforcement can reach $50,120 per violation. State attorneys general are also authorized to bring enforcement actions under the Act, giving the statute a second enforcement channel that operates independently of federal agency priorities.

The compliance obligation runs primarily to the online marketplace, not to the seller. Marketplaces like Amazon, eBay, Walmart Marketplace, and Etsy are required to implement verification procedures and to make disclosures about high-volume sellers. If a marketplace fails to comply, it faces FTC liability. For sellers, the primary consequence of non-compliance is account suspension — the marketplace is required to suspend the seller if the seller fails to provide required information or provides false information.

Verification Requirements and What Marketplaces Must Actually Do

The INFORM Act requires marketplaces to take active verification steps — not merely passive collection of seller-provided information. For high-volume third-party sellers, marketplaces must:

• Collect and verify the seller’s bank account information — either the bank account number and routing number or a payment processor account that has been verified as belonging to the seller
• Collect and verify a government-issued ID or tax identification information, confirmed to belong to the individual or entity identified as the seller
• Certify that the information collected is accurate and that the marketplace has taken commercially reasonable steps to verify it
• Annually re-certify that the verified information remains accurate

The verification requirements exist because counterfeit sellers, fraud operations, and illicit goods distributors historically operated through marketplace accounts using false identities and unverifiable contact information. When a consumer was defrauded, there was no reliable way to find and serve process on the seller, making civil judgment practically uncollectable. The INFORM Act is designed to create a verified record that both the marketplace and law enforcement can use.

Consumer-Facing Disclosure: What Buyers Will See

For product listings by high-volume third-party sellers, the marketplace must display the seller’s full name (or the name under which it sells), physical address, and contact information. If the seller uses a different business to supply or fulfill products, the marketplace must disclose that on the listing and, upon consumer request, provide the name, address, and contact information for that fulfillment business.

This disclosure requirement has practical implications for private-label sellers and dropshipping operations. If your product listing names your brand but the product is actually fulfilled by a manufacturer or third-party logistics company, that fulfillment relationship must be disclosed to any consumer who requests it. Sellers who have structured their operations to keep supplier relationships confidential should evaluate whether that structure is compatible with the INFORM Act’s disclosure requirements.

How the INFORM Act Interacts with Platform Terms of Service