Amazon is one of the biggest online marketplaces in the world, and it is constantly working to ensure that its platform is safe and secure for buyers and sellers. To this end, Amazon is requesting verification for specific information related to Amazon Seller Accounts due to the new US federal law, the INFORM Consumers Act, which takes effect on June 27, 2023.
Background
Starting June 27, 2023, the FTC and states will enforce the INFORM Consumers Act. Violating this act may result in severe civil penalties and damages, restitution, or other compensation if charged by the states. The law was created to increase online transactions’ transparency and deter criminals from selling stolen, counterfeit, or unsafe items through online marketplaces. If you’re a business owner or working with clients, it’s essential to understand how this new law affects your operations.
The INFORM Consumers Act sets new requirements for online marketplaces. These platforms are defined as businesses or individuals facilitating consumer product sales, payments, shipping, and deliveries in the United States. The law mandates that online marketplaces collect and verify specific financial and identifying information from high-volume third-party sellers that meet specific sales thresholds on the platform. Moreover, online marketplaces must disclose the seller’s name, address, and contact details on product listing pages, order confirmation messages, and account transaction histories. Failure to provide the required information by high-volume third-party sellers can lead to their suspension, and online marketplaces must offer a straightforward way for consumers to report suspicious activity.
If you’re interested in learning more about the INFORM Consumers Act, we recommend reading the new business guide and the text of the law. The law aims to provide online marketplaces with more information about their sellers, and sellers must comply promptly to avoid suspension. Consumers can report the questionable activity through a designated platform. Online marketplaces are expected to have measured by the effective date, and the FTC will monitor their compliance efforts.
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What does this mean for Amazon Sellers?
The INFORM Consumers Act applies to third-party sellers on Amazon.com. All sellers who, in any continuous 12-month period within the last 24 months, have sold at least 200 new or unused consumer products or earned gross revenues of $5,000 or more must comply with the law.
To comply with the act, Amazon must verify various details about a business, including its identity, bank account, phone number, business address, tax identification number, and email address. This step is crucial to prevent fraudulent activities and ensure that only legitimate sellers operate on the platform.
Identity: (a) For individual sellers, the name of the individual legally authorized to act on the sellers’ behalf. (b) For business sellers: the business name and name of a business point-of-contact. The information requested by Amazon is as follows:
- Bank account information;
- A working business phone number;
- Business address;
- Tax identification number; and
- A working email address.
Consequences of Not Providing Information
If sellers do not provide the required information, their selling account may be temporarily deactivated, and their disbursements may be held. This can be a severe problem for sellers who rely on Amazon as their primary source of income, so it is essential to provide the required information as soon as possible.
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Additional Verification Steps
Amazon already has verification processes, but the new law requires additional steps to verify information related to high-volume sellers. Sellers may be required to complete other verification steps even if the INFORM Consumers Act does not currently cover them. This ensures that all sellers on Amazon are legitimate and buyers can trust the platform.
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Checking Verification Status
Sellers should visit their Account Health page or Account Information page in Seller Central to see which pieces of information Amazon has verified and which parts are still outstanding. This will help sellers to ensure that they have provided all of the required information and that their account is in good standing.
Data Privacy and Security
Amazon takes data privacy and security very seriously and handles personal information through the Amazon.com Privacy Notice. Sellers can rest assured that their information is safe and secure when provided to Amazon.
Issues with Tax Questionnaire and Bank Account Information Submission
Amazon is working to address issues with the Tax Questionnaire and bank account information submission. If sellers need help with these processes, they should contact Amazon.
Disbursement Withholding
Disbursements will not be withheld if verification is in the process as of June 8th, and sellers only need to submit the information requested to start the verification process by June 8. This means sellers have some time to provide the required information, but they should do so as soon as possible to avoid disruptions to their accounts.
Questions
Speak With an Amazon Seller Attorney at ESQgoⓇ. An Amazon seller attorney can help explain the Amazon Verification process and what you can expect to happen. They can also help you through the entire process of getting your business comply with Amazon. We can be reached by calling 866-203-0541 or via our contact page. We offer a free initial 30-minutes consultation.
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