Legislation to increase transparency and accountability for online marketplaces amid the rapidly growing problem of illicit goods sold online was introduced in the US Senate March 23rd. Senators Durbin (D-IL), Cassidy (R-LA), Hirono (D-HI), Grassley (R-IA), Coons (D-DE), and Tillis (R-NC) introduced the INFORM Consumers Act to modernize consumer protection laws and require online marketplaces to collect and verify basic business information from sellers, in addition to requiring high-volume sellers to provide contact information to consumers.
Throughout the pandemic US e-commerce grew by 44 percent as more families shopped online. At the same time criminal networks targeted unsuspecting customers with the sale of stolen, counterfeit, expired, dangerous, and defective products. Because of this urgent situation, the Buy Safe America Coalition, a diverse group of retailers, consumer groups, wholesaler-distributors, and manufacturers that support efforts to protect consumers and communities from the sale of counterfeit and stolen goods, has publicly declared its support of the introduction of this legislation.
“We need common-sense transparency to protect consumers from the sale of fraudulent, expired, defective, and unsafe products,” said Buy Safe America Coalition spokesperson, Michael Hanson. “The INFORM Consumers Act will make it much harder for scam artists and criminal enterprises to peddle illicit goods to unsuspecting American consumers.”
“Consumers deserve to know who they are buying products from online in order to make safe and informed purchasing decisions for themselves and their families,” said Alex Gourlay, Co-Chief Operating Officer, Walgreens Boots Alliance. “The INFORM Consumers Act will bring transparency and accountability to today’s digital marketplaces and make it much more difficult to deceive consumers with fake, counterfeit, expired or stolen items.”
“Reducing retail crime is about protecting products and more importantly, protecting our associates and guests when these sophisticated crimes are committed,” said Mary Dillon, Ulta Beauty CEO and Retail Industry Leaders Association (RILA) Chair. “Minimizing these threats starts with addressing the anonymity the Internet provides and increasing accountability in the online marketplaces. The INFORM Consumers Act moves us in the right direction on such an important issue.”
“The INFORM Consumers act rightfully recognizes e-commerce platforms’ responsibility to collect and verify third-party seller information to prevent the sale of fake, defective, or stolen products,” said 3M Chief Trademark Counsel, Colette Durst. “This is an important milestone in our efforts to combat fraud and counterfeiting and protect the public from those who try to exploit the demand for products, including critical products like 3M respirators, during the pandemic.”
“Toys sold in the United States must comply with strict standards and undergo stringent testing to ensure that they are safe,” said Ed Desmond, EVP External Affairs, The Toy Association. “Unfortunately, when consumers are shopping online, they don’t always know exactly who they are buying from and there’s a risk of purchasing unsafe illicit products. By collecting verified information for sellers before they begin selling online, we can help ensure consumers are making informed purchasing decisions and buying safe product from legitimate sellers.”
The INFORM Consumers Act’s introduction comes in the wake of some of the largest and most notable retail crime busts in history, including the Department of Homeland Security’s seizure of millions of counterfeit masks, the recovery of $8 million in stolen merchandise and goods heading to online marketplaces in California, and the discovery of a $10 million theft ring led by Amazon drivers in Washington state. Data collected from asset protection managers (APMs) at leading retailers nationwide – 67 percent of whom reported an increase in ORC since March 2020 and 80 percent of whom expect ORC to increase further this year – confirms the severity of the situation.
“The INFORM Consumers Act makes clear that transparency is key to combatting the sale of illicit goods online and makes it easier for law enforcement to track offenders,” said Blake Adami, Vice President of Government Relations for the National Association of Wholesalers-Distributors. “Online marketplaces, like Amazon and Facebook, should be accountable for the activity on their platforms to ensure only legitimate goods are sold by verified sellers. This legislation is a common-sense solution to address the growing problem of organized retail crime and its consequences for both consumers and businesses.”
“The Automotive Anti-Counterfeiting Council (A2C2) applauds the introduction of the INFORM Consumers Act,” said Teena Bohi, President of A2C2. “This legislation will help eliminate counterfeit automotive components sold on online marketplaces, as well as other goods, that could harm US consumers.”
“Consumers deserve to have a friction-free shopping experience founded on the quality and integrity of the brands they trust,” said Selina Thurer, Business Marketing & Sales Leader, Philips Personal Health, North America. “The INFORM Consumers Act will ensure customers can feel confident that the products they purchase online through retailers and digital marketplaces are legitimate and safe.”
“HP joins its fellow members of the Buy Safe America Coalition in applauding the introduction of the INFORM Consumers Act,” said Andy Binder, Vice President and General Manager, Toner Supplies Solutions, HP Inc. “By bringing more transparency and accountability to online marketplaces, we can better protect unsuspecting customers from counterfeit products.”
