Schakowsky Introduces Legislation to Protect Consumers Online

July 23, 2020
Press Release

WASHINGTON, DC – Today, U.S. Congresswoman Jan Schakowsky (IL-09), a Senior Chief Deputy Whip and Chair of the Consumer Protection and Commerce Subcommittee, introduced legislation to combat the online sale of stolen, counterfeit, and dangerous consumer products by requiring verification of third-party sellers on online retail marketplaces.  The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act directs online platforms that allow for third-party sellers of consumer products to authenticate the identity of high-volume third-party sellers, which will provide consumers with much-needed information and also prevent organized retail crime. The bill will also ensure that consumers can see basic identification and contact information for high-volume third-party sellers of consumer products on online marketplaces. U.S. Senators Dick Durbin (D-IL) and Bill Cassidy, M.D. (R-LA) have introduced the Senate companion bill, and Representative Kathy Castor (D-FL) is an original cosponsor of the House bill. 

“While online marketplaces attract more and more consumers as a result of the pandemic, it’s critical for consumers to know who they are buying consumer products from. American manufacturers and retailers alike are fighting to survive as they compete with knock-off versions of their own products, sometimes appearing to be authentic, but lacking in quality or safety. It is critical for consumers and legitimate businesses be protected from counterfeit, stolen, and dangerous products by requiring more transparency on online marketplaces,” said Congresswoman Schakowsky. “This bill is a commonsense, easy fix, and I hope for swift passage.” 

The INFORM Consumers Act directs online marketplaces to verify high-volume third-party sellers by acquiring the seller’s government ID, tax ID, bank account information, and contact information. High-volume third-party sellers are defined as vendors who have made 200 or more discrete sales in a 12-month period amounting to $5,000 or more. 

The legislation instructs online marketplaces to order their high-volume third-party sellers to disclose to consumers the seller’s name, business address, email address, phone number, and whether the seller is a manufacturer, importer, retailer, or a reseller of consumer products. The online marketplace will also need to supply a hotline to allow customers to report to the marketplace suspicious marketplace activity such as the posting of suspected stolen, counterfeit, or dangerous products. 

“The coronavirus pandemic has made it abundantly clear that third-party sellers with little to no oversight are preying on Americans who are shopping online,” said Rep. Kathy Castor (FL-14). “Our neighbors shouldn’t have to worry about whether or not the products they order online are legitimate, arrive as described or will keep their families safe. Our bill will crack down on shadowy third-party sellers and require them to provide identifying information while ensuring consumers know who they’re purchasing from.” 

The INFORM Consumers Act has received support from a diverse array of organizations including Public Citizen, Kids in Danger (KID), National Consumers League, Illinois-based Ulta Beauty, the Retail Industry Leaders Association (RILA), the Toy Association, TIC Council, Juvenile Products Manufacturers Association, the Halloween Industry Association, and others. 

“The INFORM Consumers Act will add a layer of protection for consumers who purchase products that turn out to be unsafe on an online marketplace by requiring certain contact information of third-party sellers be made publicly available. More transparency is needed to keep sellers of unsafe products, especially children's products, accountable," said Nancy Cowles, Executive Director of Kids In Danger (KID).  "We thank U.S. Rep. Jan Schakowsky for introducing this important bill to protect consumers and children." 

“We thank Rep. Schakowsky for introducing the INFORM Consumers Act, which will ensure consumers have the important information about products sold online needed to make good decisions when shopping,” said Remington S. Gregg, Counsel for Civil Rights and Consumer Protection, Public Citizen. 

“Providing consumers with basic information about whom they are buying products from and how to contact the company is a cornerstone of consumer protection,” said Sally Greenberg, Executive Director of the National Consumers League. “We strongly support Congresswoman Schakowsky’s legislation and urge its swift passage.”  

“Reducing retail crime is about much more than protecting our products from being stolen. Our employees and customers are put at risk when these crimes are committed in our stores. Minimizing these threats and protecting our people starts with making it harder to sell stolen goods online and it will be harder for criminals to sell online when the marketplaces increase their accountability by verifying basic information about the sellers. Ulta Beauty thanks Congresswoman Schakowsky for her leadership and strongly supports The INFORM Consumers Act,” said Ulta Beauty CEO and Retail Industry Leaders Association Chair Mary Dillon. 

“The growth of stolen and counterfeit goods is exacerbated due to the anonymity currently afforded to third party sellers by the dominant big tech platforms,” said RILA Senior Executive Vice President for Public Affairs Michael Hanson. “Digital shoppers are often duped and law enforcement cannot readily track down criminal rings targeting legitimate businesses. By requiring these online marketplaces to verify information about the sellers on their platform, the INFORM Consumers Act is a critical step in deterring organized retail crime and protecting consumers. RILA appreciates Congresswoman Schakowsky’s leadership on this issue and looks forward to working with her to get this legislation passed into law.” 

“eCommerce and online marketplaces are very important for small companies like mine to bring the joy of play to families all around the world. Unfortunately, counterfeiters are also able to benefit from this greater access putting families and children at risk. Seller verification and transparency are two key tools in this fight against unsafe counterfeits while giving toy manufactures and game publishers the increasing ability to properly support our intellectual property,” said Ray Wehrs, President of Calliope Games located in Redmond, WA. “We applaud Representative Schakowsky for introducing INFORM Consumers. This is not a partisan issue and we hope to see republicans and democrats alike supporting these commonsense measures to reduce consumer exposure to unsafe counterfeit toys and games while simultaneously providing additional support to our nation’s intellectual property.” 

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