The INFORM Consumers Act goes into effect today and the FTC has put marketplaces on notice they must be compliant from day one or face fines up to $50,120 per violation!
Amazon sellers in particular have faced a difficult path with a laborious and glitch-ridden verification process that has left some in limbo waiting for postcards in the mail that may not arrive before Amazon is required to take action against their accounts.
According to the new law, if sellers have not provided the required information within 10 days of being asked for it, marketplaces must "suspend any future sales activity of such seller until such seller provides such information or certification" - but what about sellers who are making a good faith effort to provide the information and have hit a roadblock due to failures in Amazon's process?
Amazon posted the following announcement in the seller forums, informing sellers if they are not verified by July 7, their funds will be put on hold.
On June 27, 2023, the US INFORM Consumers Act takes effect. Over the past few months, we’ve been reaching out to selling partners who are covered by the law to request business information and complete additional verification checks to ensure compliance with the law.
To see if you have any outstanding requests for verification, check your Account Health dashboard. If any information is required, follow the instructions provided. You’ll also receive an email notification if you’re still required to take any action.
If you do not provide the required information within 10 days of this notification, disbursements for your Amazon selling account will be put on hold starting July 7.
If you’ve already provided the information required to complete these verification checks, thank you. Once your information has been fully verified, the "Account deactivation warning" banner related to INFORM will be removed from your Account Health page.
We may need to reverify your information if you make changes to it after it has been verified. We’ll inform you if we require additional information. We are also obligated by law to ask you to confirm that your Selling on Amazon account information is up to date at least once a year.
We’ve made many improvements to our verification processes based on your feedback. We appreciate your efforts in providing this information to us.
Sellers responded sharing their frustrating experiences with trying to comply with the verification requirements.
Identity verification remains unverified after submitting my verification more than 10 days ago, and I received no emails telling me what's next. I wrote in to seller support and all I got was a reply saying they can't provide any support because my inquiry has got nothing to do with identity verification. Absurd.
We are not able to complete the process because of the system error. The seller support rep informed us that only the verification team is able to edit the page and we are still in the queue. It's not that we don't want to comply with the law. It is Amazon system forbids us to do so. desperate here...
We have been submitting account information for verification since May 28th, but the identity verification failed. We have not received any emails or case responses indicating that the identity information is incorrect. We inquired about Amazon support services over the phone and received a response that they had no authority to resolve our issue and referred it to the account team for processing.
We have not received a response from the account team for more than 20 days now. At the same time, we want to resubmit our identity information for a second verification, but every time we click on the identity verification, it is always forwarded to the help page. We feel very hopeless. Our case is 12980995301, We haven't received a response for over 20 days. We hope you can help us.
Yes this has been available for 1.5 months, but it hasn't worked for 1.5 months. Great. Thanks.
Still waiting to verify my address as everything else has been completed
It's important for sellers to understand that this law as written applies to the marketplaces, not to them as individual sellers.
The marketplaces are required by the law to collect, verify, and in some cases disclose seller information but the legal burden for implementation and fines for non-compliance rests squarely on the marketplaces.
Per the FTC:
What are the consequences for violating the INFORM Consumers Act?
A violation of the law is treated as a violation of an FTC rule. So online marketplaces that don’t comply may face FTC law enforcement that could result in civil penalties of $50,120 per violation.
The statute also gives enforcement authority to State Attorneys General and other officials authorized by the State. They may file an action in federal court to enjoin further law violation, seek civil penalties and other remedies permitted under state law, and obtain damages, restitution, or other compensation for residents of that state.
What should I do if I suspect a violation of the INFORM Consumer Act?
Report it to the FTC at ReportFraud.ftc.gov. Click “Report Now,” then scroll down to “Something else,” and be sure to mention the “INFORM Consumers Act” somewhere in your report.
Given what appears to be severe misexecution and botched implementation by Amazon, sellers who find themselves stuck in limbo in this process should file a report with the FTC.
It is Amazon's legal responsibility to have implemented a process that would allow them to be in compliance as soon as this law went into effect - if they failed to do so, and are now jeopardizing sellers' business as a result, they should be held accountable to the fullest extent of this new law.