Temu will pay $2 million in civil penalties and operate under a permanent court order after federal regulators accused the company of violating consumer protection laws. The order, entered September 8 by Judge Myong J. Joun of the U.S. District Court for the District of Massachusetts, resolves a lawsuit filed by the Justice Department on referral from the Federal Trade Commission.
The complaint alleged that Temu, operated by Whaleco Inc., failed to comply with the INFORM Consumers Act and Section 5 of the FTC Act. Regulators said the company did not provide clear tools for consumers to report suspicious marketplace activity and withheld required information about high-volume third-party sellers.
According to the government’s filing, Temu delayed offering a telephone reporting option until January 2024 and failed to include reporting mechanisms in its gamified shopping features until November 2024, months after the law took effect. The FTC also alleged that seller names, addresses, and contact information were often hidden behind multiple steps or vague links, making it difficult for buyers to obtain basic details.
The order requires Temu to maintain accessible reporting systems, both online and by phone, and to display seller information clearly across all versions of its platform. Temu must also submit yearly compliance reports to the FTC for ten years, and the injunction permanently bars the company from repeating the conduct described in the complaint.
The INFORM Consumers Act, enacted in 2022 and effective in June 2023, was designed to reduce the sale of counterfeit, stolen, and unsafe goods. It requires online marketplaces to verify and disclose details about high-volume third-party sellers and to give consumers a way to report suspected fraud. Violations are treated as unfair or deceptive practices under Section 5 of the FTC Act, which prohibits companies from misleading or harming consumers in commerce.
The Temu case is among the earliest enforcement actions under the statute. Platforms such as eBay, Amazon, and Temu account for a growing share of consumer purchases, and regulators have emphasized the need to monitor online marketplaces as e-commerce expands.
Temu agreed to the order without admitting liability. The company remains subject to financial penalties and long-term federal oversight.
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