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From next month Internet auction companies who have buyers or sellers living in Illinois or companies that are based in Illinois will have to register with the state.

The move is aimed at protecting consumers. Illinois want to be able to find an online buyer or seller if a citizen of the state is the victim of fraud.

The measure will require companies to maintain records of transactions for two years. They must also certify that sellers and bidders register with the Website and provide sufficient information to resolve problems. The transaction information that must be kept includes seller identification, high bidder identification, and what the item sold for after the close of the transaction. Firms registering in Illinois must also have a way to receive complaints or inquiries from users. A policy for suspending user accounts must also be in place and the registrant must state the firm will assist law enforcement with requests for stored information.

The law does not affect traditional auction firms that use Internet bidding as part of their selling programme, but international online firms would be required to register with the state if they have Illinois customers.

Norm Willoughby, deputy assistant commissioner for the state’s Office of Banks and Real Estate, where companies would register, said there was a distinction between live auctions, which are covered by existing state legislation, and online firms. For example online giants such as eBay only act as the Website platform for the buyer and seller to meet. No one from eBay actually sees the items being offered. At a traditional auction that also sells through the Internet, the auctioneer can still view the items being sold.

Illinois have been working toward this law for two years. The state wanted to come up with a way of protecting consumers without creating overly cumbersome measures for the auction firms to adopt. eBay’s lawyers have praised the legislation, with a spokesman for the firm calling it “very well conceived” and affording “strong protections and remedies for those rogue Internet businesses that seek to prey upon unsuspecting consumers”. eBay plan to be one of the first companies to register in Illinois.

While the bill producing this new law has already been signed, not all of the administrative rules are written up. Mr Willoughby hoped everything would be ready to file by October.
While the Illinois government hope that most online auction firms will register voluntarily, the state are aware of many of the thousands of online auction firms that could attract either buyers or sellers from Illinois. If firms don’t register, the state could contact them and ask for the registration.

“The Internet has been anonymous. We are trying to take some of that anonymity out of it,” Mr Willoughby said.

For more information log on to www.obre.state.il.us or telephone (001) 217 785-9640.