The INFORM Consumers Act: Still Suspending Sellers in 2025
The INFORM Consumers Act has been active for years, but are you sure you're compliant? For high-volume sellers, a simple data mismatch can lead to immediate account suspension. Learn what you need to do to protect your revenue.
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Introduction
What if a simple, out-of-date piece of information—like an old business address or phone number—could get your entire online store shut down overnight? Since the INFORM Consumers Act went into full effect back in mid-2023, that's not a "what if." It's the reality for thousands of high-volume e-commerce sellers.
This federal law completely changed the game by demanding a new level of transparency. It requires online marketplaces like Amazon and eBay to collect, verify, and disclose key information about their top sellers.
While its goal was to protect consumers, its most immediate impact has been on sellers themselves. We're now two years into its enforcement, and the biggest lesson we've learned is that compliance isn't optional—it's essential for survival.
Key Takeaways
What Is the INFORM Consumers Act, Really?
Let's cut right to the chase. The INFORM Consumers Act isn't just another piece of bureaucratic red tape you can ignore. It's a fundamental shift in how transparency works in e-commerce, and it has been actively enforced since it went live back in mid-2023.
At its heart, the law was built to fight fraud and protect consumers from counterfeit goods and shady, fly-by-night operations.
Just think about it from a shopper's perspective for a second. For years, a huge chunk of consumers felt... uneasy about the anonymous nature of online shopping. Data showed that 65% of consumers were concerned about how companies handled their data, and a wild 60% didn't trust companies to protect it. The INFORM Act is a direct answer to that exact feeling.
More Than Just Rules... It's a Standard
The law forces online marketplaces like Amazon, eBay, and even smaller niche sites to verify the identity of their "high-volume sellers." This isn't just about showing a name; it’s about proving you are a legitimate, real-world business. The goal is to make it much, much harder for bad actors to hide behind anonymous profiles, leaving a trail of fake products and angry customers.
For legitimate sellers like you, it's simply a new operational standard. We’ve seen firsthand how this law has become a non-negotiable part of selling online, and our Compliance & Protection services are designed to help you navigate it.
Who Exactly Needs to Comply? The "High-Volume" Seller Breakdown
That term, "high-volume third-party seller," sounds a bit intimidating, but the definition is actually super specific. You fall under the INFORM Consumers Act if, over any continuous 12-month period in the last 24 months, you hit either of these two thresholds:
You've made 200 or more separate sales or transactions.
You've generated $5,000 or more in gross revenue.
It's critical to remember... you only need to hit one of those, not both. For most serious sellers, that $5,000 revenue mark can happen surprisingly fast. This means the law applies to a massive part of the third-party seller community, from established brands to growing side hustles. This is where having a Custom Solutions Partner can help manage the complexities of scaling.
Seller Thresholds at a Glance
Here’s a simple table to break down who the law targets:
Metric | Threshold | Subject to INFORM Act? |
|---|---|---|
Annual Sales (Units) | 150 | No (if revenue is under $5,000) |
Annual Revenue | $4,500 | No (if sales are under 200) |
Annual Sales (Units) | 201 | Yes |
Annual Revenue | $5,001 | Yes |
As the law firm Hogan Lovells notes, the responsability to identify you falls squarely on the marketplace. They are the ones legally required to track these numbers and poke you for your information once you cross the line.
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The Core Data You MUST Provide
When a marketplace like Amazon or Walmart flags you as a high-volume seller, they will reach out and require a specific set of documents. This is a mandatory step, and your cooperation is essential to keep your account in good standing. Procrastinating here is not an option.
So, what do they actually need? Here’s the list of core data points you have to get ready:
Bank Account Number: A valid, working bank account for your business. Marketplaces need to verify this is a real, legitimate account.
Government-Issued ID: This could be your driver’s license, passport, or other state-issued ID.
Tax Identification Number (TIN): For businesses, this is usually your Employer Identification Number (EIN). For sole proprietors, it might be your Social Security Number.
Working Contact Information: A functional email and phone number. And yes, they will test them to make sure they work.
The All-Important Verification Process
Don't think you can just submit some numbers and be done. Marketplaces are required by law to verify this information. They cross-reference it with official databases and use services to confirm it's all authentic.
For you, the seller, this means one thing: the name on your ID, your tax papers, and your bank account must all align perfectly. Any mismatch can trigger a compliance review and a potential suspension, which is a key area our Compliance & Protection services help prevent.
Transparency in Action: What Your Customers Will See
Okay, this is where the rubber really meets the road for sellers. The INFORM Act has a very specific disclosure rule that's meant to build consumer trust, but it can be jarring for sellers who have always valued their privacy. It all boils down to one number: $20,000 in annual gross revenue.
If your sales on a single platform (like Amazon) go over this amount, the marketplace is legally required to display this info on your product listing pages or seller profile:
Your full name (or company name).
The full physical address for your business.
On top of that, the marketplace has to provide a working phone number and email for customers to reach you. If you don't have a business phone, they have to state that explicitly.
A Tool for Building Trust
While some sellers fretted about this level of disclosure, we've actually seen it become a mark of legitimacy. Since this has been in effect for a couple of years, shoppers are used to it. Having a physical address and contact info signals that you are a real, accountable business. In a crowded market, that transparency can be a massive competitive advantage, something a Listing Audit & Quality Score Analyzer can help you leverage.
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The Real Penalty: Why Marketplace Suspensions Matter More Than Fines
Let's be crystal clear about where the real risk is. The INFORM Act says the FTC can impose fines on the marketplaces if they fail to comply. But as a seller, your biggest, most immediate, and financially painful threat isn't a fine from the government.
It's an account suspension from Amazon, eBay, or Walmart.
Since the law took effect, we've seen marketplaces take a very aggressive, no-nonsense stance. They have to, since they're the ones on the hook for penalties. The moment their system flags a seller for non-compliance—whether it's failing to provide documents or not doing the annual certification—they often move to suspend the account immedately.
The Immediate Consequences...
This isn't just a slap on the wrist. A suspension means:
Zero Sales: Your listings get deactivated, and your revenue from that platform stops instantly.
Frozen Funds: Payouts are often held until the entire compliance issue is resolved.
An Operational Nightmare: You have to scramble to submit the right documents and deal with the platform's reinstatement process, which can be painfully slow. You can avoid this by working with Amazon Brand Protection Services
The story since 2023 has been consistent: thousands of sellers have experienced these deactivations. The penalty isn't some far-off possibility; it's an immediate, automated consequence of failing to keep your data in order.
How Marketplaces Are Enforcing the INFORM Act
Marketplaces aren't just sitting back and waiting for you to update your information. They’ve built heavy-duty, automated systems to enforce the INFORM Act because their own necks are on the line. Each platform has a slightly different look, but their core enforcement methods have become pretty standard.
Platform-Specific Approaches
Amazon
On Amazon, this is all handled inside Seller Central. You'll get prompted on your "Account Health" dashboard to complete identity verification. This means uploading copies of IDs and tax documents. Amazon's systems then cross-reference everything with your legal entity and bank info. Any little discrepancy will flag your account for review.
eBay
eBay has built similar checks into its seller hub. They poke high-volume sellers to certify their info every year. A key focus for eBay is making sure contact details—especially phone numbers—are real and actively monitored. They will test them.
Walmart Marketplace
Walmart made INFORM Act compliance a non-negotiable part of their seller agreements. For new high-volume sellers, verification is just part of onboarding. For existing sellers, failing to comply leads to a swift account hold. They've made it clear: comply or you can't sell. When expanding, it is important to know these subtle differences between platforms. Something we help with our Global Marketplace Expansion Service
As the Fintech Law Blog pointed out, even "marketplaces with as few as one third party seller" are covered, so this level of enforcement is the new industry standard everywhere.
What Happens If I Don't Comply With the INFORM Act?
By now, it should be glaringly obvious that non-compliance isn't a real strategy. It's not a matter of if you'll get caught, but when the marketplace's automated system flags your account. The consequences are direct, fast, and can bring your sales to a screeching halt.
Ignoring those requests to update your seller info is like ignoring a recall notice for your car... sooner or later, it's going to break down, and probably at the worst possible time.
The whole process is usually automated. An algorithm flags your account. A notification gets sent. If you don't act in time, your account is automatically suspended. Often, no human is involved in that first step. This is the kind of operational risk our Direct Wholesale Partner program is designed to eliminate.
Compliant vs. Non-Compliant Seller: A Tale of Two Outcomes
Let's just visualize the impact. Here’s a simple comparison of two sellers facing an info request.
Action / Status | The Compliant Seller | The Non-Compliant Seller |
|---|---|---|
Information Request | Receives request, verifies all info is current and accurate. | Receives request, ignores or forgets about it. |
Account Status | Remains active and in good standing. | Suspended or placed on hold after deadline. |
Sales & Revenue | Uninterrupted. Business as usual. | Immediately halted. No new sales can be made. |
Next Steps | Focuses on growing the business. | Must contact seller support and provide all required data to begin the reinstatement process. |
The difference is pretty stark, right? Compliance is just good business continuity planning.
Staying Compliant: It's an Ongoing Process
Compliance with the INFORM Consumers Act isn't a one-and-done task you check off a list. It's an ongoing responsability that needs your attention. The most important part? The annual certification requirement.
At least once every year, marketplaces must ask you to certify that your information on file is still current and accurate. They'll notify you through email and your seller dashboard. Treating this notification with urgency is critical.
It's usually just a few clicks to confirm, but failing to do so will trigger the exact same consequence as failing the initial verification: an account suspension.
A Proactive Compliance Checklist
To avoid any nasty surprises, we tell sellers to do a quarterly "health check" on their info. Here’s a simple checklist to run through, which you can monitor with a tool like our Platform (Dashboard):
Business Address: Have you moved? Make sure your physical address on file is up to date.
Bank Account: Changed banks? Ensure your verified account is the one you are actively using.
Contact Info: Is your phone number and email current? This is crucial for both marketplace AND customer communications.
Tax ID: Has your business structure changed (e.g., from sole proprietor to LLC)? Make sure your Tax ID matches your legal entity status.
Keeping these things aligned across all platforms is the real key to seamless, uninterrupted operations. It turns compliance from a reactive panic into a routine part of running your business.
Conclusion
The INFORM Consumers Act has been the law of the land for over two years now, and its message couldn't be clearer: transparency and accountability are the new cornerstones of e-commerce. For any high-volume seller, compliance isn't just a legal formality; it's a critical piece of risk management.
Remember, the biggest threat isn't a government fine, but the immediate and costly penalty of an account suspension from the very platforms that fuel your business.
The path forward is simple. Treat your business information like a key asset. Keep it meticulously updated everywhere you sell, jump on any verification or certification request, and embrace the transparency the law demands. By doing that, you don't just protect your revenue... you build the kind of trust with customers that creates long-term success. In 2025, staying compliant means staying in business.
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