INFORM Consumers Act 2025: Compliance Checklist for Online Marketplaces

The INFORM Consumers Act 2025 mandates enhanced transparency from online marketplaces and high-volume sellers, requiring verification and disclosure of seller information to combat illicit activities and protect consumers.

Are you an online marketplace or a high-volume seller gearing up for 2025? The digital commerce landscape is constantly evolving, and staying compliant is more crucial than ever. Understanding the INFORM Consumers Act Compliance for 2025 is not just about avoiding penalties; it’s about building trust and ensuring a fair marketplace for everyone.

Understanding the INFORM Consumers Act

The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, or INFORM Consumers Act, was enacted to bring greater transparency to online marketplaces. Its core purpose is to protect consumers by requiring online marketplaces to verify and disclose certain information about high-volume third-party sellers. This legislation aims to deter the sale of counterfeit, stolen, or unsafe goods by making it harder for unscrupulous sellers to operate anonymously.

The Act primarily targets online marketplaces that allow third-party sellers to list products, and those sellers deemed “high-volume.” The definition of a high-volume third-party seller is key: it generally refers to a seller who, in any continuous 12-month period during the prior 24 months, has made 200 or more separate sales resulting in $5,000 or more in gross revenues. As we approach 2025, it’s vital for all involved parties to thoroughly understand these definitions and their implications.

The legislative intent behind INFORM

The INFORM Consumers Act emerged from growing concerns about the proliferation of stolen and counterfeit goods sold online, often by anonymous sellers. Lawmakers recognized that the lack of transparency made it difficult for consumers to hold sellers accountable and for law enforcement to track down illicit operations. The Act seeks to address this by fostering a more transparent and accountable online retail environment.

• Protecting consumers: Ensures buyers have access to essential seller information, enabling informed purchasing decisions.
• Deterring illicit activities: Makes it harder for bad actors to sell stolen or counterfeit products by requiring identity verification.
• Promoting fair competition: Levels the playing field for legitimate businesses by reducing the advantage of anonymous, non-compliant sellers.
• Enhancing accountability: Provides mechanisms for consumers to contact sellers directly and for marketplaces to respond to complaints.

Ultimately, the INFORM Consumers Act represents a significant shift in how online marketplaces must operate, placing a greater burden of responsibility on them to verify sellers and protect their users. Compliance isn’t just a legal necessity; it’s a strategic move to build and maintain consumer trust in an increasingly competitive digital landscape.

Key Requirements for Online Marketplaces in 2025

For online marketplaces, 2025 brings a heightened focus on several core compliance requirements under the INFORM Consumers Act. These mandates are designed to ensure that consumers have clear, actionable information about who they are buying from, thereby reducing fraud and increasing accountability. Marketplaces must implement robust systems to meet these obligations.

The primary responsibilities for marketplaces revolve around seller verification and disclosure. This includes not only collecting specific data but also ensuring its accuracy and making it accessible to consumers. Failure to adhere to these requirements can result in significant penalties and reputational damage. Proactive planning and system upgrades are essential for seamless compliance.

Seller information verification

One of the cornerstones of the INFORM Consumers Act is the requirement for marketplaces to verify the identity of high-volume third-party sellers. This isn’t a one-time check but an ongoing process to ensure the information remains current and accurate. The verification process is comprehensive, covering various aspects of a seller’s identity.

• Bank account verification: Marketplaces must verify bank account information for sellers, ensuring that payouts go to legitimate entities.
• Contact information: Verification of email addresses and phone numbers is crucial for direct communication channels.
• Tax identification: Collection and verification of a seller’s tax ID (e.g., EIN or Social Security Number) are mandatory to confirm their legal standing.
• Government-issued identification: For individual sellers, marketplaces may need to verify government-issued identification documents.

Marketplaces are expected to use reasonable efforts to verify this information within ten days of a seller qualifying as high-volume. If a seller fails to provide the necessary information or if the information cannot be verified, the marketplace must suspend future sales until compliance is achieved.

Disclosure of seller identity to consumers

Beyond verification, marketplaces are also responsible for disclosing certain seller information directly to consumers on product listing pages. This transparency empowers consumers to make more informed purchasing decisions and provides a direct line of communication if issues arise. The specific information to be disclosed depends on the seller’s legal structure.

For individual sellers, the marketplace must disclose their full name and physical address. For business entities, the business name, physical address, and contact information (email or phone) must be provided. This information should be clearly visible and easily accessible on the product listing or through a readily available link.

The goal here is to bridge the information gap that often exists in online transactions, making the online shopping experience safer and more trustworthy for everyone involved.

Compliance Checklist for High-Volume Sellers

High-volume sellers, as defined by the INFORM Consumers Act, bear significant responsibilities in ensuring their own compliance and cooperating with marketplace requirements. The Act places a direct onus on these sellers to provide accurate and up-to-date information, understanding that their participation is critical to the overall success of the legislation. For 2025, sellers must revisit their internal processes and data management.

Being a high-volume seller means you’ve achieved a certain level of sales volume and revenue, which also means you have a greater impact on the marketplace and its consumers. Therefore, the requirements for transparency and accountability are elevated. Preparing for these requirements now will prevent disruptions to your sales operations and maintain your standing on various platforms.

Providing accurate seller information

The most fundamental step for high-volume sellers is to ensure that all information provided to online marketplaces is entirely accurate and current. This includes personal and business details, contact information, and financial data. Any discrepancies can lead to delays in verification or even suspension of selling privileges.

• Business name and legal entity: Confirm your registered business name matches official records.
• Physical address: Provide a valid, verifiable physical address for your business or residence.
• Working contact information: Ensure your phone number and email address are active and regularly monitored.
• Tax identification number: Double-check your EIN or SSN for accuracy.
• Bank account details: Verify that the bank account linked for payouts is correct and in your name or business name.

Sellers should also be prepared for marketplaces to periodically re-verify this information. Establishing a routine for reviewing and updating your seller profile on each platform you use is a best practice. This proactive approach minimizes the risk of non-compliance issues.

The Impact on E-commerce Operations

The INFORM Consumers Act will inevitably reshape various aspects of e-commerce operations for both marketplaces and high-volume sellers. From onboarding new sellers to managing customer disputes, the ripple effects of these regulations are broad. Businesses need to consider how their existing workflows and technologies align with the new compliance landscape for 2025.

One significant area of impact is the cost of doing business. Marketplaces will need to invest in more sophisticated verification technologies and processes, which may translate into higher fees for sellers or increased operational expenses. Sellers, in turn, may need to allocate resources to ensure their data is meticulously managed and readily available for verification.

Operational adjustments for marketplaces

Marketplaces face the most substantial operational overhauls. They are tasked with building robust systems for data collection, verification, and disclosure. This requires significant technological investment and process re-engineering. Marketplaces must also develop clear policies for dealing with non-compliant sellers.

• Enhanced onboarding processes: Implement stricter identity verification steps for new high-volume sellers.
• Automated data verification: Utilize technology to streamline the verification of bank accounts, tax IDs, and contact information.
• User interface modifications: Design clear and accessible ways to display seller information on product pages.
• Dispute resolution mechanisms: Establish clear procedures for consumers to report issues with sellers and for marketplaces to address them.
• Data security protocols: Strengthen data security to protect sensitive seller information collected during verification.

Furthermore, marketplaces will need to train their customer service and compliance teams to handle inquiries related to seller transparency and verification. Clear communication with sellers about these new requirements will be crucial to ensure a smooth transition.

Challenges for high-volume sellers

While marketplaces bear the primary responsibility, high-volume sellers will also encounter new challenges. The need to maintain updated and accurate information across multiple platforms can be administratively intensive. Additionally, the increased transparency may alter consumer behavior, potentially requiring sellers to adapt their customer service and communication strategies.

Sellers must be prepared for potential delays in account activation or payout if their information is not promptly verified. They also need to understand that their publicly displayed information might be used by consumers for direct contact, requiring them to have effective communication channels in place.

Benefits of INFORM Act Compliance

While the INFORM Consumers Act introduces new obligations, it also brings significant benefits to the entire e-commerce ecosystem. Beyond simply avoiding penalties, compliance fosters a healthier, more trustworthy online environment that ultimately benefits consumers, legitimate sellers, and the marketplaces themselves. These advantages extend to brand reputation, customer loyalty, and operational efficiency.

Embracing the spirit of the INFORM Act, rather than just its letter, can be a competitive differentiator. Businesses that are proactive in demonstrating transparency and accountability are likely to earn greater consumer trust and stand out in a crowded digital marketplace. This long-term perspective can yield substantial returns.

Increased consumer trust and safety

Perhaps the most direct benefit of the INFORM Consumers Act is the enhanced trust it builds between consumers and online platforms. When buyers know they can easily identify and contact a seller, they feel more secure in their purchases. This reduces anxiety about potential fraud or misrepresentation.

• Reduced risk of fraud: Verified sellers are less likely to engage in fraudulent activities, protecting consumers from scams.
• Accountability for product quality: Consumers can more easily hold sellers responsible for defective or misrepresented products.
• Easier dispute resolution: Direct access to seller information simplifies the process of resolving issues, reducing friction.
• Safer shopping environment: A transparent marketplace deters bad actors, creating a generally safer space for online transactions.

This increased trust translates into greater consumer confidence, potentially leading to higher conversion rates and repeat business for legitimate sellers and marketplaces. A reputation for safety and reliability is invaluable in the digital age.

Improved marketplace integrity

For online marketplaces, INFORM Act compliance strengthens the integrity of their platforms. By weeding out fraudulent or non-compliant sellers, marketplaces can enhance the quality of their offerings and protect their brand reputation. This also creates a more equitable playing field for legitimate businesses.

A marketplace known for its rigorous seller verification and transparent practices attracts more reputable sellers and discerning buyers. This virtuous cycle contributes to sustainable growth and a healthier ecosystem. It also reduces the administrative burden of dealing with numerous fraud complaints.

Preparing for 2025: A Strategic Approach

As the 2025 deadline for full INFORM Consumers Act compliance draws nearer, both online marketplaces and high-volume sellers must adopt a strategic and proactive approach. Waiting until the last minute can lead to rushed implementation, potential non-compliance, and operational disruptions. A well-thought-out plan involves assessing current capabilities, identifying gaps, and allocating resources effectively.

The compliance journey isn’t just about meeting legal mandates; it’s an opportunity to refine existing processes, enhance customer trust, and secure a competitive advantage. Businesses that view this as an investment in their future rather than just a regulatory burden will be better positioned for long-term success.

Auditing current practices and systems

The first step in strategic preparation is a thorough audit of your current practices and technological infrastructure. Marketplaces should evaluate their seller onboarding, verification, and data management systems. High-volume sellers should review their record-keeping and information-sharing protocols with marketplaces.

• Marketplace assessment: Evaluate current seller verification tools, data storage, and public disclosure mechanisms.
• Seller data review: High-volume sellers should verify the accuracy and completeness of all information provided to marketplaces.
• Policy analysis: Review internal policies to ensure they align with the Act’s requirements for data handling and dispute resolution.
• Technology gap identification: Pinpoint areas where new software or system integrations are needed to facilitate compliance.

This audit will provide a clear picture of where your organization stands and what steps are necessary to achieve full compliance. It’s also an excellent opportunity to identify any inefficiencies that can be resolved during the compliance overhaul.

Developing an implementation roadmap

Once the audit is complete, the next phase involves developing a detailed implementation roadmap. This roadmap should outline specific tasks, timelines, responsible parties, and necessary resources. For marketplaces, this might involve significant IT projects, while for sellers, it could focus on administrative process changes.

Collaboration between legal, IT, operations, and customer service departments is essential. Each team plays a vital role in ensuring that all aspects of the INFORM Consumers Act are addressed comprehensively. Regular progress reviews and adjustments to the roadmap will help keep the project on track.

Future Outlook and Continued Vigilance

The INFORM Consumers Act is a landmark piece of legislation, but it is unlikely to be the final word on online marketplace regulation. The digital commerce landscape is constantly evolving, and lawmakers will continue to adapt to new challenges and technologies. Therefore, maintaining a posture of continuous vigilance and adaptability is crucial for long-term success.

Businesses should view INFORM Act compliance not as a one-time project, but as an ongoing commitment to transparency and consumer protection. Staying informed about potential amendments, new interpretations, or related legislation will be key to navigating the future regulatory environment effectively.

Anticipating regulatory evolution

The legislative environment surrounding e-commerce is dynamic. New technologies, such as AI-driven product recommendations or blockchain for supply chain transparency, could introduce new regulatory considerations. Businesses should monitor legislative developments and engage with industry associations to stay ahead of the curve.

• Stay informed: Regularly review updates from government agencies and legal experts regarding e-commerce regulations.
• Industry engagement: Participate in industry groups and forums to share insights and best practices on compliance.
• Technology watch: Monitor emerging technologies that could impact regulatory requirements or offer new compliance solutions.
• Internal review cycles: Establish periodic internal reviews of compliance practices to ensure ongoing adherence and identify areas for improvement.

By adopting a forward-looking perspective, marketplaces and high-volume sellers can not only ensure compliance with current laws but also position themselves to adapt quickly to future regulatory changes, safeguarding their operations and fostering continued growth.

Frequently Asked Questions About INFORM Act Compliance

Conclusion

The INFORM Consumers Act sets a new standard for transparency and accountability in the online retail world, challenging both marketplaces and high-volume sellers to adapt their operations. As we move closer to 2025, proactive engagement with these regulations is not merely a legal obligation but a strategic imperative. By prioritizing robust verification processes, clear information disclosure, and continuous vigilance, businesses can not only ensure compliance but also strengthen consumer trust, enhance marketplace integrity, and foster a safer digital commerce ecosystem for everyone. Embracing these changes will pave the way for sustainable growth and a more reliable online shopping experience.