Retailers back proposed INFORM Consumers Act targeting organized crime

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Retailers back proposed INFORM Consumers Act targeting organized crime

By Marianne Wilson - 07/24/2020

Legislation has been introduced that targets organized retail crime and would shed light on certain sellers by requiring online retailers to verify high-volume sellers.

The Retail Industry Leaders Association announced its support for the INFORM Consumers Act legislation introduced by Rep. Jan Schakowsky (D-Ill.). It would require common-sense disclosures and accountability from big tech platforms like Amazon.com who increasingly sell products from third-party sellers on their websites.

The bill is designed to provide consumers with greater transparency by requiring online marketplaces to simply verify a seller’s information and for the seller to provide contact information to consumers, according to RILA. The legislation will hold big tech marketplaces accountable for fraudulent transactions and allow law enforcement to better identify high-frequency sellers suspected of trafficking stolen and counterfeit goods. 

“Consumers continue to buy items online in record numbers, and that shift has exposed a growing and dangerous trend that must be dealt with immediately—the exponential growth of stolen and counterfeit goods sold through online marketplaces,” said RILA senior executive VP for public affairs Michael Hanson "The INFORM Consumers Act provides a measured response to this problem by requiring online marketplaces to verify information about the sellers on their platform.”

Retailers have seen a dramatic increase in organized retail crime in recent years, with career criminals targeting stores with alarming frequency, and in many cases, escalating levels of violence. This is because perpetrators, often organized and coordinated to target multiple retailers, are increasingly turning to online marketplaces to move large quantities of stolen merchandise.

A report released earlier this year by the Department of Homeland Security (DHS) underscored the growing problem of counterfeit goods sold on marketplace platforms, highlighting the need for Congress and regulators to do more to hold sellers and the platforms accountable when fake or illicit products are sold to unsuspecting consumers.

“The continued anonymity and unregulated environment in which these platforms operate have made them a stage to sell products that would never be allowed on a store shelf,” said Hanson. “Stolen goods, expired and defective products, products made with unsafe levels of chemical substances, and products that do not meet U.S. quality and safety standards are often deceptively marketed and sold through these platforms.”

Tackling the sale of counterfeit and stolen goods is a top priority for leading retailers, but it will require the tech community to step up and do their part. 

“Large marketplace platforms employ some of the most sophisticated data scientists and logistics professionals in the world, and it is clear the know-how exists to identify and crack down on these illegitimate sales,” said Hanson. “It’s time these companies use their considerable resources and savvy to verify their sellers and shut down criminal elements and fraudsters that are using their platforms as a pipeline for unloading stolen and counterfeit goods.”