Season 1, Episode 101

INFORM Consumers Act: What You Need to Know

Congress recently passed the INFORM Consumers Act, going into effect June 27th. What does this mean for Amazon sellers? In this episode, Chris and Leah give an overview on what this bill entails, who it affects, and how it may affect your business in the near future. 

Show Notes


Chris: [00:00:00] Hello everybody. Welcome back to another episode of Seller Performance Solutions. I’m Chris McCabe of ecommerceChris, I’m here with Leah McHugh, also of ecommerceChris. How are you doing, Leah?

Leah: Good, thanks. How are you, Chris?

Chris: Great as always. Today’s hot, hot, hot topic is the INFORM Consumers Act.

Heard a lot about this lately. Amazon sent out some messaging recently about June 27th being the red letter day for when they’re going to start enforcement. I’ve heard that they’ve done enforcement already. They’ve already started re-verifying accounts. It looks like there’s already some identity verification changes in the offing.

Do you want to just give a quick overview for people based on your reading of the act and its potential impact on Amazon? Sellers are really sellers of any online marketplace.

Leah: Sure. Well, so June 27th is actually the day that the act comes into effect. It’s not the a day that Amazon decides to start enforcing it.

Chris: I thought those were one and the same, no? [00:01:00]

Leah: Well, I mean, in theory they should probably have it already started before June 27th, because that’s the deadline for having that information.

Chris: For those of you unfamiliar Amazon with four weeks lead time, A project of this complexity and magnitude, very difficult to accomplish across the board.

Leah: Well, so I mean, a lot of this information Amazon already has on sellers. But I’m getting ahead of myself anyway, so the act basically means that Marketplaces have the legal obligation to collect certain information from high volume sellers. It’s kind of funny because in Amazon’s notification they say that it obliges the seller to provide information, which technically it does, but the act itself specifies that the marketplace is obligated to obtain that information. So before we even get into that, what does high volume seller mean? Because what you think of as a high volume seller on Amazon isn’t necessarily what Congress thinks is a high volume seller. So according to the Congressional [00:02:00] Act, a high volume seller is 200 or more transactions a year with revenues of $5,000 or more in a 12 month period.

Chris: So basically everybody.

Leah: Yeah, not really what I would call high volume, but sure. Congress, they’re not selling on Amazon.

Chris: They’re talking about all online marketplaces. They can’t give one number for Amazon, one number for Walmart. Maybe they should, but they probably can’t do that for whatever reason.

Leah: So it requires that the marketplaces obtain bank account information, which obviously they already have government issued identification, which at this point Amazon, I would think has from most sellers since they’ve been doing verification.

Tax identification numbers and contact information. it also obliges the online marketplaces to make that information available to consumers if requested and also on the product listing itself. So a lot of this stuff we’ve already been seeing Amazon doing.

Chris: Yeah. The good news is they’ve already been asking for [00:03:00] this. They’ve already kind of done some prep by pushing people to review this stuff, correct it, make sure it matches. That’s the good news. Of course, the bad news is we’ve seen implementation all over the map in terms of how Amazon verifies a seller account, what they consider verifiable.

And then when it comes to invoices, of course, you go down another rabbit hole with why are they rejecting my invoice? Why are they rejecting my supplier? But then there’s the video calls confirming your identity and they’re already behind on those.

Leah: Backing that up a little bit.

So those sellers have already gone through this process at this point. What sellers should be doing right now though is just double checking the account information that they have inside Seller Central. Make sure that it’s all up to date. Make sure that it hasn’t been rolled back at some point.

Maybe if you needed to have your account sanitized or to go rolled back and you didn’t notice at the time, which I think we talked about a few weeks ago. We did make, make sure that all of the information on your account is correct and then also make sure that you have. [00:04:00] Documentation that matches the information on your account.

Because we have already seen Amazon start re-verifying accounts that have already been through the verification process since they sent the email a few weeks ago. So that’s the most proactive things that sellers can be doing right now is checking the information on the account, making sure it’s accurate, making sure that they have all of the documentation requested.

Chris: Many sellers who have already been verified by Amazon, will have to do it again. They might wonder why they have to do it again. They might wonder why they’re mixed in with newer sellers who are going through this identity verification process.

Why they have to show invoices for things they’ve sold for years. Tip number two today, is don’t waste time wondering why. Just understand that there’s the INFORM Consumers Act. Amazon has to do this stuff. Understand in advance that Amazon won’t necessarily be consistent in how they implement this.

There’ll be mistakes. They might schedule video verification calls with [00:05:00] people and then not show up for them, we’ve heard about that happening quite a bit. Sometimes they’ll reschedule with you when their rep doesn’t show up, and they’ll miss that one too. Not telling you this to panic. Just be ready for things not exactly going down the way they advise you to prepare for them, or they’re not going down the way they promise that they’ll fulfill their obligations on their side.

Leah: Yeah, I mean, realistically, there’s no way they’re going to be able to re-verify all sellers by June 27th. So, I’m not really assuming that that’s going to be consistent in the next month or so, and I don’t get the sense that they’re trying to re-verify all sellers. That being said, the notification that they did send out did mention that they may require you to do this annually now to confirm that all details.

Chris: So this may not happen to you, but be prepared for it in case it does happen to you because we’ve tried to predict which sellers they’ll throw into which buckets for however long in the past. We usually have a [00:06:00] pretty good yard stick based on experience for that sort of thing, but no one’s going to be right a hundred percent of the time, and Amazon sometimes changes things up, not even just for us, for their own internal people.

In terms of how they do it. Sometimes it’s going too slowly. Sometimes there are too many errors. Sometimes they learn by doing so it can change even after this process begins. Good things to keep in the back of your mind while you prep for this, whether or not you actually get a message saying, Hey, today’s the day.

Yeah, and again, all of the information that they’re asking me for is pretty basic business information that you should have anyway. I mean, government issued ID, I assume everybody has at this point a business address, your bank account information, a working email address, and a working phone number. I mean, these are all pretty basic. Oh, and a tax identification number. These are all things that you needed to open your account anyway. So it’s just making sure that all of your information matches the documentation that you have.

Oh, sure. In theory, [00:07:00] It’s a piece of cake. It should be a piece of cake.

It should be straightforward. But this is Amazon we’re talking about, right? They’re always bringing a guy outta the bullpen to throw curve balls. So that’s what they need to prepare for because just on the face of it, bank account statements address, while everyone has a bank account, so it seems straightforward.

Leah: But we’ve also seen many, many sellers put bank account information on their account and then don’t have a bank account statement that matches the rest of the information on their account. So that’s the main prep preparation point that I would like sellers to check before, before they get requested for this information.

Chris: And some people, it’s been fixable, it’s solvable, but some people would just update an address. Obviously some of what we’re talking about today is make sure everything’s updated. In the past, we’ve seen some people update credit card info, bank account info, street address, whatever, and then they were temporarily deactivated.

That wasn’t that unusual, fixable, but sometimes there’d be a gap or [00:08:00] an interruption in selling. Clearly some of this we will find out throughout the month of June as this comes into effect, I’m sure we’ll see certain changes. Amazon will be getting themselves ready for it, not just getting sellers ready for it.

One thing to keep in mind, if you show up for your video verification call, the Amazon rep isn’t there, or they even tell you that they won’t be there and they reschedule you and then they don’t show up for that. Make sure you’re not forgotten. Make sure you’re not just waiting to hear back from them with the threat of a deactivation hanging over you or God forbid you’ve already been deactivated, because waiting is not always the best thing to do, even if it’s something they tell you to do and you’re trying to follow their instructions.

If you have to call into account health reps and find out, Hey, how do I get this rescheduled? Do that. If you’re really getting desperate because that’s not working either check with us in terms of who you could potentially think about emailing and how you can try to get it rescheduled. But we’ve heard from some sellers who have been rescheduled a couple of times.

Obviously, if they’re piling on [00:09:00] thousands and thousands of these all within four weeks, people are going to be missed, mistakes will be made. So just don’t sit back passively and wait for Amazon to come to you. Be proactive and make sure if they’re the ones who aren’t showing up. Or if for some reason you have trouble on your side and you don’t show up, make sure you’re proactively following up and rescheduling those.

Leah: Also, make sure that the person whose government ID you’re using is the person on the verification call. That is also an error that we’ve seen sellers make. Don’t have your employee present your ID. You need to be the one on the call.

Chris: And obviously we’re heading into Prime Day very soon. This is happening on the cusp of it, right before it. Craziness will ensue. Right? So we’ll be covering this again, this won’t be our last podcast on the INFORM Consumers Act but just keep in mind that things tend to be disruptive very quickly.

Sometimes Amazon tries to preempt confusion and disorganize behavior and it creates more of it. They’re trying to get out in front of it as best they can, but it’s a [00:10:00] large organization. Lots of different teams that don’t have a great history of talking to each other, that are siloed from each other.

So just keep us informed. If you want to put anything in front of us, get our opinion on it, feel free. Otherwise do your best to keep all your information ready to go. Documentation on your suppliers invoices ready at a moment’s notice in case they come asking for it. Because you might not necessarily get tons of notice from Amazon if they are delayed, if they are behind on things.

Per the usual. And as Leah said, make sure the right person is ready for that call and they’re not on a beach somewhere sipping pina coladas and not available for the verification call.

Leah: I mean, if the beach has wifi, go for it.

Chris: Maybe, not a lot of sand you can plug into these days, but yeah, we’ve heard of some people trying workarounds, illicit means of

faking, who’s on the call, misrepresenting, who’s there to verify the account. This is not something that you should be doing. Amazon is doing a lot better on [00:11:00] this than they have in the past on verifying which documents have been fabricated or edited or manipulated. You don’t want to be caught in all of that because then you’ll start getting suspension notices that cite the code of conduct, calling you a bad actor saying you don’t belong in the marketplace.

That would be a terrible way for you to experience. The suffering involved in an account suspension, especially if you’re an established seller with big time losses that you could be facing.

Leah: Yeah. And they’re also using facial verification software on the call. Yes. So, makes it even harder to pretend someone else is you.

Chris: We are not facial software recognition experts by any means but we’ve already heard some horror stories. Do not believe anyone who tells you that you can fake this and slide this past them. Don’t even try it, is my closing words of advice.

Leah: Yeah. And my closing words of advice is that faking it as fraud.

Chris: And it’s also illegal, not just against policy, which we will never say that you should try. Any questions [00:12:00] on this obviously an evolving topic. There’ll be more episodes on it. Feel free to let us know. And thanks again for joining us for another episode of Seller Performance Solutions.

Hosts & Guests

Chris McCabe

Leah McHugh


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