Psychics

In my spare time I've been looking at action by consumer protection agencies against psychics.

Here's a 2007 announcement by the UK Office of Fair Trading -

As part of its Scams Awareness Month, the OFT is warning consumers not to fall for bogus clairvoyant mailings sent out to thousands of people in the UK every year.

Letters from so called psychics or clairvoyants offer predictions or promise healing properties for a small fee. Often these mailings are aggressive in tone, predicting that something bad will happen if the recipient does not send them money. Although they are sent out in their thousands, the mailings are personalised to make recipients look as if they have been specially chosen and those who respond can be repeatedly targeted.

In one example uncovered by the OFT a mailing told consumers that the place they were living in was 'a zone which has been 'booby trapped' by negative waves', and it offered a solution for a payment of £29.

Extravagant and potentially misleading claims are also made about rituals the psychic will undertake or items, such as jewellery, that the psychic will provide and which it is claimed will bring the recipient good luck and will ward off evil forces.

'Lucky' items include Esmerelda's 'Money creating Scarab of the Pharoes', Gabriel d'Angelo's 'Happiness Beamer, Serena's 'Parchment of the Sacred Olive Branch' , Maria Rosa's 'Bracelet of Ameno' Lise and Rose's 'Gold Card' and Marie Desperance's 'Golden Thread'.

Recent OFT commissioned research into the impact of mass marketed scams indicated that more that 170,000 consumers fall victim to clairvoyant scams every year, losing around £40 million.

The OFT's Scambusters team has written to the following 'clairvoyants' about the potentially misleading content of their mailings: Chris, Esmeralda, Gabriel d'Angelo, Lisa and Rose, Maria Rosa, Marie Desperance, Pia Anderson, Rachel, Serena. None have responded. As a result the OFT is publicising its actions to allow consumers to make informed choices about 'clairvoyants' who are using PO Boxes as return addresses for their mailings. It will also be contacting overseas counterparts to ask them to shut down any post boxes used by those named.

Claims made by those named by the OFT include:

* 'Maria Rosa' who claimed 'in the next few days you will have the very tidy sum of £169,000 in your possession'
* 'Gabriel d'Angelo' claimed 'You have to trust me ... BECAUSE YOUR FUTURE AND YOUR HAPPINESS DEPEND ON IT'
* 'Lise and Rose' claim that 'there is, in your home, in the very place where you are living, a zone which had been booby trapped'
* 'Serena' claimed that 'Your life will be beautiful and you deserve it, thanks to the Parchment of the Sacred Olive Branch which will protect you and bring you happiness'.

Their supposed psychic gifts apparently failed to predict action by the OFT.

In the US the Federal Trade Commission in 2002, under the heading 'FTC Charges "Miss Cleo" with Deceptive Advertising, Billing and Collection Practices', announced that -

"Free Readings" Result in Large Phone Bill Charges

"Miss Cleo," the purportedly "renowned psychic" whose ads promote "free" readings to callers seeking advice, is the subject of a federal district court complaint filed today by the Federal Trade Commission. The complaint charges two Florida corporations, Access Resource Services, Inc. (ARS), and Psychic Readers Network (PRN), with deceptive advertising, billing and collection practices.

"You don't need a crystal ball to know that the FTC will continue to stop unfair and deceptive trade practices," said J. Howard Beales III, Director of the FTC's Bureau of Consumer Protection. "We want consumers to know that when companies make a promise in an ad, they need to deliver."

The defendants' entire operation is alleged to be permeated with fraud. According to the complaint, the defendants misrepresent the cost of services both in advertising and during the provision of the services; bill for services that were never purchased; and engage in deceptive collection practices. The defendants also harass consumers with repeated, unwanted, and unavoidable telemarketing calls that consumers cannot stop. The FTC also alleges that the defendants often respond to consumers' inquiries with abusive, threatening, and vulgar language.

The FTC's complaint names ARS, doing business as Aura Communications; Circle of Light; Mind and Spirit; and PRN, doing business as Psychic Readers Network, Inc., and their officers, Steven Feder and Peter Stolz. ARS and PRN, both located at the same address in Fort Lauderdale, Florida, operate as a common enterprise to induce consumers to buy their audiotext services -- information or entertainment programs provided over the telephone lines. The defendants purportedly are the largest providers of "psychic" audiotext services in the United States, and use a variety of marketing tools to attract consumers to their services, including TV, print media, the Internet, and direct mail. The defendants make their services available to consumers via 900 telephone numbers and bill for each minute spent on the line at a per-minute rate. They use a national network of "psychic readers" to provide "readings" to the consumer who calls the 900 number.

Specifically, the FTC's complaint alleges that the defendants:

* Deceptively misrepresent, in their advertising, that a "reading" will be provided at no cost;
* Through their agents, misrepresent the cost of the calls by claiming that consumers' free minutes have not expired, that the consumer had been awarded additional free time, or that the consumer will not be charged while on hold;
* Falsely represent that consumers are legally required to pay for services even though, in many instances, no such legal obligation exists; and
* Engages in unfair practices by frequently and repeatedly calling consumers, including consumers who had previously indicated they did not wish to receive such calls, and by failing to provide consumers with a reasonable method to stop such calls.

In addition, the complaint alleges that the defendants violated the FTC's 900 Number Rule by:

* Failing to make required cost disclosures in their advertisements, and diluting the disclosures that they do make with contradictory information; and
* Threatening to report adverse information to credit reporting bureaus without first conducting an investigation of billing errors.

The FTC is seeking a temporary restraining order against the defendants.

Miss Cleo & Co apparently dealt with the FTC by agreeing to a multimillion dollar settlement, rather than consigning them all to the devil. The FTC announced that -

In a landmark settlement, Access Resource Services, Inc. (ARS) and Psychic Readers Network, Inc. (PRN) have agreed to a stipulated court order stopping all collection efforts on accounts or claims from consumers who purchased or purportedly purchased their pay-per-call or audiotext services and forgiving an estimated $500 million in outstanding consumer charges as part of a settlement with the Federal Trade Commission. The Florida-based companies and their officers operated a massive 900 number scheme known to the public as the "Miss Cleo" psychic lines. The FTC alleged that the defendants engaged in deceptive advertising, billing, and collection practices. The settlement also requires the defendants to pay $5 million to the FTC.

"The lesson in this case is that companies that make a promise in an ad need to deliver on it - whether it's about availability, performance, or cost," said J. Howard Beales III, Director of the FTC's Bureau of Consumer Protection. "I'm no psychic, but I can foresee this: If you make deceptive claims, there is an FTC action in your future."

The FTC's complaint [PDF] and settlement [PDF] are online