Marketplace Seller Verification & KYC Policy (INFORM Act Compliant)

MARKETPLACE SELLER VERIFICATION & KYC POLICY

Marketplace Name: [________________________________]
Effective Date: [__/__/____]
Policy Owner: [________________________________]
Version: [____]
Approved By: [________________________________]

TABLE OF CONTENTS

1. Purpose and Legal Framework
2. Scope and Applicability
3. Key Definitions
4. Seller Data Collection Requirements
5. Verification Procedures
6. Annual Certification and Ongoing Verification
7. Seller Disclosure Requirements
8. Reporting Suspicious Sellers to Consumers
9. Suspension and Termination
10. Recordkeeping and Audit
11. Consumer Notice and Support
12. Law Enforcement Cooperation
13. Training and Oversight
14. Policy Review
15. Annexes

1. PURPOSE AND LEGAL FRAMEWORK

1.1 Purpose

This Policy establishes procedures for collecting, verifying, disclosing, and maintaining information about Marketplace Sellers in compliance with the INFORM Consumers Act (15 U.S.C. § 45f), effective June 27, 2023. The INFORM Act requires online marketplaces to collect and verify certain information from high-volume third-party sellers and to provide disclosure mechanisms to consumers.

1.2 Legal Framework

2. SCOPE AND APPLICABILITY

This Policy applies to:

☐ All marketplace sellers offering goods or services through [________________________________] ("the Marketplace")
☐ Domestic and international sellers shipping to U.S. customers
☐ All product categories listed on the Marketplace
☐ Internal teams responsible for seller onboarding, verification, compliance, trust and safety, and customer support

2.1 INFORM Act Applicability Threshold

The INFORM Act verification and disclosure requirements apply to "high-volume third-party sellers" — defined as marketplace sellers who, in any continuous 12-month period, have:

☐ 200 or more discrete sales or transactions of new or unused consumer products; AND
☐ An aggregate total of $5,000 or more in gross revenues

3. KEY DEFINITIONS

4. SELLER DATA COLLECTION REQUIREMENTS

4.1 Baseline Data — All Sellers

Upon seller registration, the Marketplace shall collect:

4.2 High-Volume Seller Data — Additional Requirements (15 U.S.C. § 45f(c)(1))

When a seller reaches the high-volume threshold, the Marketplace must collect:

4.3 Certified Statements

☐ Require sellers to certify that provided information is accurate and current
☐ Require sellers to update information within 10 days of any change
☐ Maintain records of all certifications and updates

4.4 Sensitive Data Handling

5. VERIFICATION PROCEDURES

5.1 Initial Verification (15 U.S.C. § 45f(c)(2))

5.2 Verification Methods

☐ Third-party identity verification service (e.g., LexisNexis, Experian)
☐ IRS TIN matching (for EIN/SSN verification)
☐ Bank account verification (micro-deposit or instant verification)
☐ Government-issued ID verification (document authenticity check)
☐ Manual review by trained compliance personnel

5.3 Discrepancy Resolution

5.4 Reverification Triggers

Reverification shall be initiated when:

☐ Seller exceeds $20,000 in revenue in any 12-month period (enhanced scrutiny)
☐ Seller changes ownership or business entity type
☐ Consumer complaint alleges seller identity fraud
☐ Law enforcement inquiry regarding seller
☐ Automated monitoring detects suspicious behavior
☐ Other risk indicators: [________________________________]

6. ANNUAL CERTIFICATION AND ONGOING VERIFICATION

6.1 Annual Certification (15 U.S.C. § 45f(c)(3))

6.2 Ongoing Monitoring

☐ Automated transaction monitoring for threshold crossings
☐ Continuous screening against sanctions lists and watchlists
☐ Review of consumer complaints for identity/verification issues
☐ Periodic sampling of verified seller data for accuracy

7. SELLER DISCLOSURE REQUIREMENTS (15 U.S.C. § 45f(d))

7.1 Product Listing Disclosures

For high-volume third-party sellers, the Marketplace must clearly disclose on each product listing page:

☐ Seller's full name (or business name if applicable)
☐ Seller's physical address (or, if the seller uses a PO Box, the country and, if applicable, the State)
☐ Seller's contact information, or a prominently labeled method for a consumer to contact the seller

7.2 Post-Purchase Disclosures

Upon completing a purchase from a high-volume seller, the consumer must receive:

☐ Seller's full name
☐ Seller's physical address
☐ Seller's email address
☐ Seller's phone number (if different from listing disclosure)

7.3 Seller Opt-Out for Address (15 U.S.C. § 45f(d)(2))

A high-volume seller may request that their street address not be disclosed to the public, provided:

☐ The seller provides a valid reason (personal safety concern)
☐ The Marketplace provides an alternative means for consumers to contact the seller
☐ The address is still available to law enforcement upon request

8. REPORTING SUSPICIOUS SELLERS TO CONSUMERS

8.1 Consumer Reporting Mechanism (15 U.S.C. § 45f(d)(3))

The Marketplace shall provide a prominently displayed mechanism for consumers to report suspicious marketplace activity. This mechanism must:

☐ Be clearly labeled (e.g., "Report Suspicious Seller" or "Report Potential Fraud")
☐ Be accessible via electronic means (webform, email) and by telephone
☐ Allow consumers to report concerns about seller identity, counterfeit goods, and fraud

8.2 Response to Consumer Reports

9. SUSPENSION AND TERMINATION

9.1 Suspension Triggers (15 U.S.C. § 45f(c)(4))

The Marketplace shall suspend a high-volume third-party seller who:

☐ Fails to provide required verification information within 10 days of request
☐ Fails to complete annual certification within 10 days of notification
☐ Provides information that the Marketplace is unable to verify after reasonable efforts
☐ Is found to have provided materially false or misleading information

9.2 Suspension Process

9.3 Termination

Terminate sellers who:

☐ Fail to cure suspension within the cure period
☐ Engage in fraud, counterfeit goods distribution, or repeated policy violations
☐ Are identified in law enforcement referrals as engaging in criminal activity
☐ Have been suspended [____] or more times in a 12-month period

Document all suspension and termination actions in the Seller Compliance Record.

10. RECORDKEEPING AND AUDIT

10.1 Record Retention

10.2 Regulatory Access (15 U.S.C. § 45f(e))

☐ Provide verification records to the Federal Trade Commission upon request
☐ Provide records to state attorneys general upon lawful request
☐ Target response time: within [____] days of request receipt

10.3 Internal Audit

☐ Conduct quarterly audits to confirm verification completeness
☐ Sample [____]% of high-volume sellers for verification accuracy
☐ Document audit findings and remediation actions
☐ Report audit results to [Compliance Officer / Legal]

11. CONSUMER NOTICE AND SUPPORT

☐ Publish educational materials on identifying verified sellers
☐ Maintain a dedicated support queue for INFORM-related consumer inquiries
☐ Track resolution times and escalate issues exceeding [____] business days
☐ Provide FAQs regarding seller verification and consumer protections

12. LAW ENFORCEMENT COOPERATION

12.1 Law Enforcement Requests

12.2 Voluntary Referrals

The Marketplace may proactively report sellers to law enforcement when:

☐ Seller appears to be engaged in organized fraud or counterfeit distribution
☐ Products pose immediate safety risks to consumers
☐ Seller activity indicates potential money laundering or sanctions violations

13. TRAINING AND OVERSIGHT

13.1 Training

13.2 Oversight

14. POLICY REVIEW

15. ANNEXES

Annex A: Verification Workflow Diagram

[Insert workflow diagram showing: Seller Registration → Threshold Monitoring → HVTPS Identification → Verification Request → Document Collection → Verification → Certification / Suspension]

Annex B: Investigation Report Template

Annex C: Law Enforcement Request Log

Annex D: Seller Communication Templates

☐ Verification request email (initial threshold)
☐ Annual certification reminder
☐ Suspension notice
☐ Reinstatement confirmation
☐ Termination notice

SOURCES AND REFERENCES

• INFORM Consumers Act, 15 U.S.C. § 45f (eff. June 27, 2023)
• FTC Act, 15 U.S.C. § 45
• FTC Enforcement Guidance on INFORM Consumers Act
• State AG enforcement authority under 15 U.S.C. § 45f(e)(2)

This template is provided for informational purposes only and does not constitute legal advice. Consult qualified legal counsel before use.