The dangers of
■ Sales tax on Web
■ Car-title loan trap
ARE YOU CONSIDERING buying prescription to see if the states prevail in their efforts to enforce
drugs from abroad? If so, you should know that Internet sales-tax rules across the board.
many pharmaceuticals produced in foreign coun-
tries may share U.S. brand names but are formulated Beware the car-title loan trap
to treat other conditions. There is currently no reg- MANY CASH-HUNGRY FAMILIES across the
ulatory body that keeps track of drug names country are in debt, and some now risk losing their
globally, and medical experts say the results could cars in a car-title loan trap. The title is a legal docu-
be dangerous. ment. It shows the car is paid off and who legally
The Institute for Safe Medication Practices owns it. But, if signed over to someone else, it gives
(ISMP) has issued alerts to doctors and hospitals, that person on-the-spot ownership.
identifying several drugs in the U.S. that have the Here’s how the trap works: In order to get a loan
same name as other pharmaceuticals sold by manu- by using the car as collateral, borrowers sign over the
facturers abroad. Here are just a few examples. title to a paid-off car. In some states, the borrower
Norpramin. It’s an antidepressant sold in the even provides the lender with a spare set of keys so
U.S.; a different formula is used to treat ulcers when the lender can take possession immediately if the
sold in Spain. borrower defaults. Th e loan amount can be a
Flomax. A treatment for prostate disease in the fraction of what the car is worth and is
U.S.; the name of a pain medication in Italy. often due to the lender within a month in
Vivelle. Treats menopause and osteoporosis in a lump-sum payment.
the U.S.; the name of a birth-control pill sold Borrowerstypicallytakealoanforjust
in Austria. a few hundred dollars, thinking they can
The Wall Street Journal recently commented that pay it back easily. However, many
for travelers who refill prescriptions in other coun- find themselves trapped in a cycle
tries, or for consumers trying to save money by buy- of not making payments and
ing prescription drugs abroad, these mix-ups could racking up interest as high as 300
result in their “not getting a life-saving drug, getting percent. This assures the victims
the wrong drug or suffering unexpected drug inter- will repeatedly roll over these
actions—especially elderly people who take multi- loans, paying high interest
ple medications.” without making a dent in the
ISMP warns travelers to bring along enough principal. Thelender,inmany
medication for their entire trip and make specific cases, simply repossesses the
note of both the brand and generic names and carand resellsitfor profit.
dosages of all drugs. The saddest part is that the
For more information, go to
www.ismp.org, or predators who offer the loans
call the Institute for Safe Medication Practices toll- get away free and clear, since the
free at 1-800-FAIL-SAFE (1-800-324-5723). victims are unaware that they
have fallen into the trap.
Sales tax on Web transactions? More information is avail-INTERNE T SHOPPERS have had a “tax-free” ride able from the Consumer Fed-for years, but that may be coming to an end.er ation of America, www.
Thirteen states are trying to join together to col-
consumerfed.org (enter “car
lect sales taxes from Web businesses and cash in on title loan” in the search box),
billions of dollars. Currently, shoppers are obligated or at (202) 387-6121. C
to pay sales taxes on Internet purchases themselves,
volunteering the information and money directly to David Horowitz is a
the state where they pay their income taxes. This leading consumer advocate.
can be a pain and is difficult to enforce, which is the His “Fight Back!” commen-
main reason why the tax rules are not widely taries are heard daily on
observed. As a result, states claim they collectively the Jones Radio Network.
lose about $15 billion a year in potential sales- For stations and times,
tax revenues. check the radio page at
AM Y CANTRELL
A FRIEND registered me
online for a continuing
education course. She
gave my contact information, but didn’t prepay.
I didn’t take the
course because it was too
expensive. I didn’t cancel,
because we thought
they’d cancel me if no
payment was received.
Later, I started getting
bills, which I ignored.
Finally, I sent a letter
stating I did not personally register for this
course, didn’t take it and
wouldn’t pay for it. They
threatened to report this
to a credit agency!
AMY CAN TRELL
How can I fight this?
Springfield Gardens, NY
TJ, sorry! The lesson here
is about personal
checked the Web
site yourself to
confirm the price
and the cancella-
tion policy. And
you should have
of assuming they’d
drop you when no
Ignoring the bills
was negligent. Also,
it’s no excuse that you
didn’t personally enroll
yourself. You gladly
accepted your friend’s
help when it suited you.
Contact the school
again and have them
show you any language on
their Web site about can-
cellation. If they can prove
it’s on the site, then they’re
right and you should pay.
But if they can’t, then con-
sider challenging the bills.
© 2005 FIGH T BACK! INC. ALL RIGHTS RESERVED.
Taxing Internet sales has been in limbo since the
start of the computer era, when the issue was collecting the tax on catalog sales across state lines. A 1992 Do you have a question for David?
U.S. Supreme Court ruling prohibits states from Just log on to
www.fightback.com and “Ask David.” He will personally
forcing a business to collect its sales taxes unless it has respond to your problem if you follow the instructions printed on his Web site.
a brick-and-mortar presence in that state. This law is (Costco members receive a rebate off the normal fee.) Questions and answers
now being questioned, since the Internet can deliver of the greatest interest to Costco members will be used in this column with
a store to a door in most states. It will be interesting the permission of the contributor and will be posted on
NOVEMBER 2005 The Costco Connection 17