New law aims to protect consumers from counterfeit goods sold online

Clothing and apparel make up about 30% of seized counterfeit items
Published: Sep. 20, 2023 at 3:04 PM EDT
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(InvestigateTV) — U.S. Customs and Border Protection (CBP) estimates that more than $100 billion in counterfeit goods are sold to Americans each year, some of which could be defective or dangerous.

The INFORM Consumers Act, which went into effect in June, aims to decrease the risk to consumers by deterring criminals from acquiring stolen, counterfeit, or unsafe items and selling them on online marketplaces.

Alaina van Horn, chief of the Intellectual Property Enforcement branch of the CBP, said ensuring that imported items are genuine and not harmful to consumers is vital. She said the act requires online marketplaces to collect, verify and disclose certain information from high-volume, third-party sellers.

“This regulation, it applies to marketplaces,” she explained. “It broadly defines marketplaces as any platform that facilitates a sale. Not only a sale, but payment storage which cuts broader than any previous legislation on this topic.”

The law applies to sellers on marketplaces that conduct 200 or more transactions totaling over $5,000 during a continuous 12-month period.

Marketplaces must also acquire and verify the seller’s bank account information, government issued ID, tax ID, and contact information. Changes must be certified annually.

“When there is a high-volume seller that makes over $20,000 in annual sales, the platform has to provide clear and convincing information on who the seller is, who the manufacturer is, where they are located, and this is the most important if. How to reach them!” van Horn shared.

According to the Federal Trade Commission (FTC), violations could result in civil penalties of more than $50,000.

Consumer Watchdog Teresa Murray with the U.S. Public Interest Research Group (PIRG) welcomes the accountability brought forth by the act. She said this law is a major step towards helping cut down on counterfeit items and bad sellers.

“For example, with a lot of the counterfeit goods that come in, I mean everybody knows they’re counterfeit, but these sellers continue to sell them, and now it basically allows people to not be hidden in the shadows as much anymore. You can’t hide!” Murray said. “It’s a way for the online marketplaces to track people who are the most egregious offenders.”

Consumers can report suspicious marketplaces or suspected violations of the INFORM Act directly to the FTC.