INFORM Consumers Act: Challenges Faced by Amazon Sellers

INFORM Consumers Act: Challenges Faced by Amazon Sellers

Hey there! The INFORM Consumers Act is shaping the way Amazon sellers operate, and it comes with its fair share of challenges. A year after its implementation, many US-based Amazon sellers are still navigating the nuances to stay compliant. You'll need to provide key information about your business annually, and even minor discrepancies can lead to suspensions or more severe penalties. With rising suspensions and complex vetting processes, sellers are dealing with increased anxiety and administrative burdens. Yet, staying informed and proactive can help you turn these challenges into opportunities for growth and better consumer protection. Have you ever wondered how the INFORM Consumers Act impacts Amazon sellers like yourself? Navigating the ever-changing landscape of online selling can be daunting, and the implementation of the INFORM Consumers Act adds yet another layer of complexity to your business operations. This act, aimed at safeguarding consumers, also introduces challenges that can affect your Amazon selling . Let's delve into what this legislation means for you, and how you can stay compliant while continuing to grow your business.

Understanding the INFORM Consumers Act

The INFORM Consumers Act (S.936) was established to create a more transparent online marketplace. The primary goal of this legislation is to protect consumers by ensuring that online retailers disclose their identities and relevant financial information. This means that as an Amazon seller, you are required to provide accurate information about yourself and your business, and update it regularly.

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The Purpose of INFORM

The purpose of the INFORM Consumers Act is to crack down on counterfeit goods and fraudulent sellers. By ensuring that sellers provide verifiable information, the act aims to build trust in the online marketplace, making it safer for consumers to shop online.

Key Requirements for Sellers

To comply with the INFORM Consumers Act, you need to adhere to several key requirements. The act mandates that online marketplaces like Amazon must:

  • Collect and verify contact, tax, and banking information from high-volume third-party sellers.
  • Prompt sellers to confirm the accuracy of this information annually.
  • Disclose information about sellers with over $20,000 in annual gross revenue in product listings and order confirmations.
  • Notify sellers of non-compliance and provide a 10-day period for rectification.
  • Ensure buyers have clear ways to communicate with sellers and report suspicious activities.

How INFORM Affects the Amazon Marketplace

Although Amazon already had vetting practices in place, the INFORM Consumers Act enforces stricter compliance measures. As a high-volume seller, meaning you sell 200 or more items and generate $5,000 or more in gross revenue within a consecutive 12-month period, you are required to undergo annual verification. This affects most active sellers on the platform.

Impact on Amazon Processes

Amazon has implemented machine learning technologies to reduce the number of bad actors attempting to open new accounts. Despite this, the stringent requirements of the INFORM Consumers Act necessitate additional processes for verification and compliance.

Annual Verification Process

Every year, you must provide and update specific business information to remain compliant. This includes:

  • Seller name
  • Government-issued ID
  • Business address
  • Bank account information
  • Tax identification number
  • Working email address and phone number

Amazon uses this data to verify your identity and ensure that only legitimate sellers are operating on their platform.

INFORM Consumers Act: Challenges Faced by Amazon Sellers

Risks of Non-Compliance with the INFORM Bill

Non-compliance with the INFORM Consumers Act can have severe consequences. Violating this act is treated as breaking an FTC rule, leading to significant penalties and other repercussions.

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Potential Penalties

If you fail to comply with the bill, Amazon may:

  • Suspend your selling privileges for withholding information.
  • Withhold your funds indefinitely.
  • Impose a civil penalty of $50,120 for every violation.
  • Subject you to litigation with a State Attorney General.

It's crucial to stay compliant to avoid these risks and ensure your continued ability to sell on Amazon.

Compliance vs. Buy Box Eligibility

While compliance with the INFORM Consumers Act does not directly affect your eligibility for the Buy Box, it is essential for maintaining your selling privileges on Amazon. Therefore, staying compliant should be a top priority for any serious Amazon seller.

Challenges Faced by Amazon Sellers

Since the act's implementation, many sellers have encountered various challenges. From technical difficulties to increased suspensions, these hurdles can make compliance a daunting task.

Rise in Suspensions

Some sellers have experienced a rise in account suspensions due to discrepancies in data, verification issues, and concerns about product authenticity. These suspensions can disrupt your business and affect your revenue streams.

Issues with the Vetting Process

The vetting process itself has posed difficulties for many sellers. Problems such as:

  • Faulty toggle buttons and missing options in forms.
  • Inconsistent access to necessary documents.
  • Requirement for additional paperwork, especially for those with credit union accounts.

These issues can cause delays and frustration, making it essential to stay organized and proactive in meeting requirements.

Strained Channels

Communication has also been a pain point, with sellers finding it challenging to know whom to contact and how to appeal decisions. This lack of clear communication can exacerbate the anxiety surrounding compliance.

Inform Consumers Act: Challenges Faced By Amazon Sellers

Information Amazon Sellers Must Provide Every Year

To stay compliant, you must provide accurate and comprehensive data to Amazon annually. Ensuring that your documents are valid, complete, and of high quality is essential for a smooth verification process.

Required Documentation

Amazon may request the following information:

Data Description
Seller Name Your full name or business name as registered.
Government-issued ID A valid ID issued by your government.
Business Address The physical address of your business operations.
Bank Account Info Details of your bank account for financial verifications.
Tax ID Number Your taxpayer identification number.
Contact Information A working email address and phone number.
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Make sure that all provided documents are in supported formats, clear, and of high resolution to avoid any delays in the verification process.

How to Update Your Business Information in 2024

Amazon sends regular reminders to sellers to update their business information. As of April 2024, all sellers with at least 200 transactions or $500 in revenue within a consecutive 12-month period must review and certify their data.

Steps to Update Your Information

Follow these steps to update your business information:

  1. Access Your Account Health Page: Navigate to the ‘Account Health' page within your Amazon Seller Central account.
  2. Go to Priority Actions: Locate the ‘Priority Actions' section and click on ‘Review your account information'.
  3. Complete Certification: Proceed to the ‘Notice and Certification' page. You have 10 days to complete the certification once you start the process.

Verification Indicators

During the verification process, Amazon uses specific indicators to show the status of your data:

  • Green Check Mark: Your information is verified.
  • Circle Beside URL: Data has not been received or processed. Click the link to check the status.
  • Grayed-Out Text: No further action needed currently, but check back for updates.

Inform Consumers Act: Challenges Faced By Amazon Sellers

Tips for Smooth Compliance

Navigating the compliance requirements of the INFORM Consumers Act can be challenging, but there are steps you can take to ensure a smoother .

Stay Organized

Keep all your documents in an easily accessible and organized manner. This will help you quickly provide the necessary information when Amazon requests it.

Regularly Check Seller Central

Stay proactive by regularly logging into your Amazon Seller Central account and checking for any new notifications or updates regarding your compliance status.

Maintain Clear Records

Ensure that your records are accurate and up-to-date. Discrepancies in the information can lead to delays or suspensions, so it's crucial to maintain accuracy.


The INFORM Consumers Act introduces several challenges for Amazon sellers, but with the right approach and proactive compliance, you can navigate these hurdles smoothly. By understanding the requirements, staying organized, and keeping your information accurate and up-to-date, you can continue to build trust with your and thrive on the Amazon marketplace.

It's essential to view this legislation not just as an obstacle but as an opportunity to contribute to a safer and more transparent online marketplace. Embrace the changes, stay informed, and keep growing your business with confidence.

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Inform Consumers Act: Challenges Faced By Amazon Sellers

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