In a major victory for retailers and consumers, the INFORM Consumers Act has been signed into law. Three years in the making, the law will require online platforms to collect and verify information about the identities of third-party sellers. The law provides transparency and accountability and is currently the only legislation designed to protect online consumers from both stolen and counterfeit goods.
Reselling Stolen Goods Is Big Business
Counterfeit goods are big business, and now, because of online marketplaces, stolen goods have also become a billion-dollar industry. Organized retail theft is rampant. Rings of thieves shoplift from stores and quickly resell the goods online. With no need to verify their own identities, tax IDs, or bank accounts, criminals can easily stay anonymous and avoid arrest and conviction. Organized retail theft occurs all over the country and the goods are sold online worldwide. This activity costs legitimate businesses money, damages brands, and threatens the safety of storefront retailers’ customers and employees.
Counterfeit Goods Can Be Dangerous
The overwhelming percentage of fraudulent products are apparel. Only one percent of counterfeit goods are pharmaceuticals. Nevertheless, even that small amount of fake and unlicensed drugs can be dangerous. It is estimated that fake prescription drugs kill approximately one million people per year.
What INFORM Requires
The INFORM act is based on the premise of transparency. Online retailers will have to collect and verify the third-party sellers’ government ID, tax ID, bank account information, and contact information. It also requires high-volume sellers to disclose contact information to consumers.
With thousands of third-party sellers, Amazon is one of the predominant purveyors of counterfeit goods. They fiercely oppose transparency laws because those laws will negatively impact their bottom line. Online sellers make money from every counterfeit product transaction, so they cannot be trusted to reform their practices when it would cut into their profits. The INFORM act is a great start to holding these retailers accountable, but it is also a reminder that where there is profit there will always be an opportunity for thieves.
iThreat’s SignalAlert helps you stay one step ahead
The INFORM Act will give retailers and consumers a new tool to protect themselves, but criminals will continue to find a way to steal. Stay one step ahead of them and protect your business with iThreat’s SignalAlert.
By watching the web in real time, iThreat can monitor and report on internet dialogue regarding critical signals that predict potential risks to your production and business. Know within minutes if there is copyright infringement or counterfeit activity with iThreat’s SignalAlert. And when we catch the bad guys in the act, you can rely on our decades of experience to help investigate and assist you in the take-down process. Check out SignalAlert today and keep your business safe all year round.
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Founded in 1997, iThreat has assisted hundreds of clients with thousands of internet monitoring and investigations, including multiple successful multinational law enforcement operations.