I am dumbfounded!

Found at: http://www.washingtonpost.com/wp-dyn/articles/A9812-2002Feb14.html

FTC Says Psychic Hot Line Is Fraud

By Caroline E. Mayer
Washington Post Staff Writer
Thursday, February 14, 2002; 1:07 PM

The Federal Trade Commission says the psychic Miss Cleo's crystal ball is shady.

In a court suit filed yesterday, the FTC said the psychic hot line promoted by Miss Cleo is "permeated with fraud."

The hot line charges for services that are advertised as free, bills customers for services that were never purchased, threatens to report consumers who challenge their bills to credit-reporting bureaus, and harasses consumers by repeatedly calling their homes, the complaint said.

The FTC is seeking a temporary restraining order, asking that the two companies that run the psychic operations be placed in receivership to make sure the deceptive and fraudulent business practices are immediately stopped and the assets are frozen for possible future consumer redress.

"I'm not a psychic but the only crystal ball I have says the FTC will continue to stop unfair and deceptive practices," said J. Howard Beales III, the director of the agency's bureau of consumer protection. "It's a mystery to us why Miss Cleo and her employees haven't seen this coming."

Named in the complaint are Psychic Readers Network (PRN) and Access Resource Services, which does business as Aura Communications, Circle of Light, Mind and Spirit and PRN. A lawyer representing the two firms did not return a telephone call.

Beales, in a press conference, said the agency's complaint was triggered by a "high volume of consumer complaints" – more than 2,000 over the past several years. Beales said the FTC estimates about 6 million consumers have responded to TV ads and mailings promoting the psychic network.

According to the complaint, the ads promise a free reading, but when consumers call a toll-free telephone number they are forwarded to a 900-telephone line that charges $4.99 a minute. Although the first three minutes are promised as free, callers are either put on hold for that time or asked basic personal information that takes up all of that time. Then, they are erroneously told that those minutes didn't count or are falsely given "free additional minutes," Beales said. They only discover the deception when they get their phone bill, with charges sometimes running up to $300, Beales added. The average bill, he said was for about $60.

2002 The Washington Post Company

May all crime cultists be outed, prosecuted and convicted.

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State sues to unmask alleged TV psychic 'Miss Cleo'

By Mitch Lipka Consumer Writer Posted February 13 2002

The state of Florida is squaring off in court with psychic pitchwoman Miss Cleo, trying to force her to prove she’s really the Jamaican shaman she has claimed to be before millions of viewers of her TV infomercials.

Florida’s Attorney General’s Office has subpoenaed Miss Cleo’s birth certificate and records that would show her relationship with Access Resource Services, the controversial Fort Lauderdale-based company that profits from her sales pitches.

Assistant Attorney General Dave Aronberg said consumers who spent millions of dollars based on the image the company has created have a right to know the truth about Cleo, including where she’s lived.

"That’s important because the whole concept of Miss Cleo is premised on her being a shaman from Jamaica," Aronberg said. "If she’s from the Bronx instead, that would be a fraud."

Assistant Attorney General Bob Buchner said he doesn’t expect the company will be able to document its claims that Miss Cleo is a world-renowned or acclaimed master psychic.

"They haven’t presented any support for that," he said. "They’ve pretty much admitted they don’t have any."

Miss Cleo subpoenaed

Jennifer Vaughn, an investigator for the Attorney General’s Office, tracked down Miss Cleo, whom she identified as Youree Harris, a 39-year-old woman living in the west Broward County community of Southwest Ranches. When Vaughn tried to serve the subpoena on Miss Cleo/Harris, a Broward County sheriff’s deputy showed up, Vaughn said, brought there by a 911 call from the woman.

After a brief lecture by the police officer about calling 911 and trying to dodge a subpoena, Miss Cleo came down the driveway to the gate and accepted the document, Vaughn said.

"She was pleasant once she finally came out," the investigator said. "She had the accent. It actually sounded more real in person."

The attorney for Miss Cleo/Harris, William J. Cone Jr. of Fort Lauderdale, is due in Broward County Circuit Court on Tuesday to try to prevent the state from unmasking his client. She is not expected to appear.

Cone would not acknowledge which of the aliases cited by the state was Miss Cleo’s true identity, but he allowed that one of them was correct. Youree Harris is the name under which she has obtained a state of Florida identification card, and Vaughn said Miss Cleo responded to being called "Miss Harris."

Miss Cleo’s true identity and history have been cloaked in secrecy since she emerged on the late-night infomercial scene last year. Millions of dollars are tied to the image of her as a Jamaican-born master psychic, making the chase for proof of her claims a high-stakes battle. Despite heated news media pursuit, Miss Cleo has successfully eluded most of her pursuers.

With her distinct accent, Miss Cleo exhorts viewers to learn more about their love lives or to peer into the future by calling a toll-free number. The call starts free, but for those who want a reading, the meter can spin as fast as $4.99 a minute.

Cone said Miss Cleo/Harris would speak publicly at some point and discuss herself " but that it shouldn’t be under a subpoena from the state of Florida.

Her business relationship with Access Resource Services should keep her separate from the state’s beef with the company, he said. Cone would not explain what that relationship is, only that it’s key to make the distinction between an employee and a contractor.

But Aronberg said Access Resources and Miss Cleo are indistinguishable.

"Just because you’re a spokesperson doesn’t insulate you from liability if you begin to take an active role in the marketing that is deceptive," he said.

"She’s not just a person who is hired to say lines. She is a person who signs their deceptive e-mails. She’s a person who signs their deceptive letters and she even signs some of their collection letters. Our initial indications are she is not merely an ignorant spokesperson."

He quoted an Access Resource Services collection letter signed by Miss Cleo:

"Taking responsibility for your actions is an important step in your spiritual journey."

Aronberg added, "I predict Miss Cleo’s spiritual journey will lead her to the courthouse."

Authorities for years have scrutinized the billing and collection and marketing tactics of Access Resource Services, a company headed by Steven Feder and Peter Stoltz of Fort Lauderdale. Their tangles with the attorney general over consumer complaints go back to when the two also were partners in the company’s predecessor, Psychic Readers Network, which featured Miami Vice star Philip Michael Thomas.

Consumer complaints have piled up by the hundreds over Access Resource’s tactics in collecting on unpaid bills, said Buchner of the Attorney General’s Office.

One of the biggest problems, he said, is that the company pursues people who don’t own the phone numbers that were placed to their "psychics."

"When consumers dispute the bill, the phone carrier takes it off," Buchner said.

"What then happens is the phone company notifies Access that they’re not getting paid for that call. What they notify Access of is only a phone number, not a name or address. Access made a decision out of, I think, greed to go after them [consumers they couldn’t prove made the calls]."

In their zeal to track down someone to bill, Buchner said, they have gotten hundreds of the wrong people. And even when they do get the right people, he said, they make threats in the letters that they shouldn’t.

Such alleged tactics have led to lawsuits and investigations by numerous state attorneys general, including those in Missouri, Arkansas and Pennsylvania. Under Florida’s most recent agreement, terms of all settlements in other states are applicable in Florida.

Buchner said the company simply hasn’t lived up to that.

Past problems

To avoid litigation, Florida and the Feder/Stoltz companies signed agreements in 1998, 1999 and last September compelling the companies to play fair with consumers.

Among other things, the company promised to refrain from threatening consumers in collection letters, turning over to collection agencies consumers who are disputing their bills until their cases are examined, advertising for "telephone solicitors" to staff the psychic hotlines and using scripts for supposedly spontaneous readings.

Buchner said Access Resource Services has stopped seeking "solicitors" and appears to be avoiding scripted readings, but isn’t living up to all its legally binding pledges.

Access Resource attorney Sean Moynihan said the company has abided by the terms of the agreements with Florida and welcomes any additional scrutiny by Buchner’s office.

Mitch Lipka can be reached at mlipka@sun-sentinel.com or 561-243-6653.

Copyright © 2002, South Florida Sun-Sentinel

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