Amazon Seller Verification and US Inform Act Causing Havoc for Sellers

In recent days, Amazon has been rolling out a barrage of seller verification checks requiring sellers to arrange virtual interviews to verify their identity. The measures are in response to the U.S. Inform Act which requires large marketplaces to collect and verify information about third-party sellers on an annual basis.

What Actions Is Amazon Taking and How Are They Verifying Identities?

Amazon released a notice on May 10, 2023, letting sellers know they'll be required to “collect, verify, and disclose information about their businesses.” In a nutshell, sellers may be required to verify some of the information below:

• Government ID
• Business Address
• Bank Information
• Tax ID

Most sellers had to provide this information to open an account, but Amazon is taking it one step further and requiring many sellers to schedule video interviews to verify this information.

Amazon Threatens Account Deactivation

The major angst sellers are feeling is because:

1) Amazon is giving a relatively short period of time for which to verify accounts (often 2 weeks or less).

2) Amazon is threatening account deactivation if the verification is not performed on time.

3) Amazon sending these warnings to marketplace sellers is overall inconsistent/inaccurate with their messaging.

In at least one of the brands we operate, we have received confusing and somewhat inaccurate messaging. For example, Amazon announced you could check within Seller Central to see if your account was verified and, if not, verify the account within Seller Central. However, upon checking, no such option can be found. We also received these emails from marketplaces we do not normally sell in, such as Mexico and Australia but not the United States, where the Act is supposed to be implemented.

What Happens if My Information Isn't Accurate within Seller Central?

For most sellers, compliance with the US Inform Act will be bothersome but not problematic as their information is accurate within Seller Central. For some sellers though, compliance could be an issue both for both good and bad actors. For example, these sellers may run into trouble for non-compliance with the Act:

• Sellers who have outdated information in Seller Central for a variety of reasons, including old addresses and phone numbers
• Sellers who are using personal bank accounts in conjunction with a business
• Sellers that opened accounts under fraudulent business identities
• Sellers that opened accounts with fraudulent personal identities

For sellers with outdated information, it appears Amazon is allowing them to simply update this information immediately and without any repercussions. 

Sellers who are using a combination of personal information or personal bank accounts with their business may have problems in the near future. It remains to be seen if Amazon will allow this. 

However, the biggest problem will pertain to sellers who have opened seller accounts with fraudulent identities, either business or personal (reducing such sellers is essentially the goal of the US Inform Act). This means trouble for many black hat sellers, especially many overseas/Chinese sellers who have been known to often operate many seller accounts opened with fraudulent information. In some of the WeChat Chinese Amazon groups I follow, there has been a lot of discussion about this issue.

What Is the US Inform Act?

The US Inform Act was passed on November 17, 2022, but doesn't come into effect until June 2023. The Act's goal is to increase transparency in online marketplaces by requiring large online platforms with over $100 million in revenue, like Amazon, to disclose certain information about their third-party sellers to consumers.

Under the Act, online marketplaces with at least 100 million monthly active users are required to disclose the following information about their third-party sellers to consumers:

• The name and contact information of the seller
• Whether the seller is located in the United States or abroad
• Whether the seller is registered with the platform
• Whether the seller has been the subject of any enforcement actions by any government agency or consumer protection organization
• Any additional information that the Federal Trade Commission determines would be useful for consumers

Essentially, the act is looking to diminish the number of counterfeit products and overall bad actors in various marketplaces. 

Conclusion

In the long run, Amazon verifying seller identity more stringently is likely a good thing for sellers playing by the rules. The major issue right now is the speed with which Amazon is rolling out these mandatory identity checks, essentially trying to verify potentially millions of sellers within just a few weeks. In the short run, it could mean a lot of potential disruption and headaches for sellers.