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New Law Targets Organized Retail Theft

The Inform Consumers Act puts onus on online marketplaces to ID crime rings.

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The Inform Consumers Act, a new federal law that aims to curb organized retail theft and the sale of counterfeit and harmful products on online platforms, is now in effect, CNBC reports. The law requires online marketplaces, such as Amazon and eBay, to verify and share information on third-party sellers that handle a high volume of transactions on their platforms to deter so-called bad actors from selling stolen or harmful goods.

Criminals have operated with “complete anonymity using fake screen names and fake addresses,” but the Inform Act will change that, Lisa LaBruno, Senior Executive VP of Retail Operations at the Retail Industry Leaders Association, told the cable news network.

“Under Inform, online marketplaces can no longer turn a blind eye to criminal actors using their platforms to sell stolen and counterfeit goods. The FTC and state attorneys general will be empowered to hold these platforms accountable, and consumers will also have their own reporting mechanism to flag suspicious activity,” said LaBruno. “For retailers, INFORM’s implementation means we have more support and partners in the fight against organized retail crime.”

The law comes on the heels of trade associations and retailers lobbying Congress to do something to help deal with an alarming uptick in retail theft that they say was driven at least in part by lax regulations governing third-party sellers and verification processes on online platforms. They say organized crime groups steal merchandise from stores and then resell it on online marketplaces, typically at a lower amount than the sticker price.

If the online companies fail to do their part, they could face more than $50,000 in fines for each violation.

Click here for the full CNBC report.

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