The New York State Consumer Protection Board ("CPB") today issued a formal notice to Access Resource Services, the Florida company behind the television "psychic" Miss Cleo
, citing the company for more than 100 apparent violations of New York State's "Do Not Call" Telemarketing Law. The alleged violations carry a maximum fine of $224,000.
At a Halloween press conference, CPB Chairman and Executive Director C. Adrienne Rhodes also released a report, "Dialing for Dollars,"
detailing the "scary" business tactics employed by the booming psychic telephone industry.
The Psychic Readers Network ("PRN") -- one of the many company names, along with Access Resource Services, used by the "Miss Cleo" psychic service -- harms the public through deceptive advertising and other business practices that may mislead consumers, according to the CPB report.
Access/PRN has 30 days to respond to the Notice of Apparent Liability. Ultimately this case can go before a CPB-based Administrative Law Judge who can assess fines of up to $2,000 for each violation of the "Do Not Call" Law.
The key objective of the "Do Not Call" Law is to restore privacy to the homes of New Yorkers and prevent the high-pressure telemarketing calls that often force consumers to immediately buy products over the telephone. Nationally, more than $40 billion is lost by consumers each year as a result of fraudulent or misleading telemarketing sales calls.
"In addition to telemarketing calls, families and individuals across the state have complained to Governor Pataki's Consumer Protection Board that 'Miss Cleo' engages in deceptive sales practices; has sold its services to minors; and has contacted hundreds of New Yorkers with a deluge of telemarketing calls, e-mails and literature that is misleading, unsolicited and unwanted," said Rhodes.
The report details the problems faced by people who work as "stay-at-home" psychics, answering phone calls for "Miss Cleo." It also reveals "Miss Cleo's" real name (Youree Cleomili Harris of Miami, Fla.) along with details on how the multi-million-dollar "psychic" business operates.
The CPB is calling on Access/PRN to stop illegal telemarketing calls in New York State. It is also asking that Access/PRN terminate a number of bad business practices that have allegedly been used to sell its so-called "psychic" and tarot card
"We have no complaint with 'Miss Cleo,' the person and the alleged 'master psychic,'" Chairman Rhodes said. "Our concern is with her employer and the misleading advertising that tricks people into thinking they can obtain a 'free psychic reading' by calling an 800 number. The CPB investigation reveals no such 'free reading' is available because the so-called "psychics" can only be reached by calling a 900 number, which carries a toll charge."
The "free" time during the 900 call is generally used to gather names, telephone numbers and address, not to give a 'psychic' reading. Many people unexpectedly find themselves facing hundreds of dollars in phone bills after calling for a "free reading."
"This so-called 'psychic' service appears to be a scam to keep people on the telephone for as long as possible," Rhodes said. "A 'psychic' phone operator can be fired if they don't maintain a 15-minute call average."
Personal information collected by "psychic readers" is then sold in order to generate advertising for "Miss Cleo" and other companies, according to the CPB report. "People who never had direct contact with a psychic service can find themselves on mailing lists that bring a flood of telemarketing calls, e-mail and other solicitations," Rhodes said.
Several New Yorkers have complained that they have received as many as 20 phone calls from 'Miss Cleo' in a two- or three-week period. Some families, even elderly couples, have received as many as three telemarketing calls in a single day.
Rhodes said many New Yorkers have received multiple phone calls, usually recordings, urging them to call one of "Miss Cleo's" toll-free numbers. While "Miss Cleo" advertises an 800 number for a "free psychic reading," consumers complain -- and the CPB investigation confirms -- that no such service is provided on the 800 telephone number advertised by "Miss Cleo." So-called "psychics" are only available on the 900 lines operated by PRN.
Through recorded telemarketing calls and e-mails, "Miss Cleo" urges New Yorkers to call to learn important information. In one e-mail, the message urged the recipient to call by a certain date to discuss a "serious health problem." "Who knows how many people may have been scared into calling this phony psychic service?," asked Rhodes.
The CPB report also details the problems faced by the people hired to be "psychics" on the Psychic Readers Network. The network in most cases charges $4.95 a minute after the initial, free minutes. Psychics are generally paid only if they keep callers on the line for at least 10 minutes. They won't get more phone calls to answer -- and make more money -- if they don't maintain a 15- to 20-minute average for all calls.
The CPB report also questions the loose standards used in selecting and hiring these so-called "psychics" because of the potential misuse of the personal information gathered on customers by these "psychic readers," Rhodes said.
Consumers listed on the Do Not Call Registry can file complaints by calling 1-800-697-1220 or by filling out a form on the CPB's Internet website at www.consumer.state.ny.us
Inclusion on the state's "Do Not Call" Telemarketing Registry is free of charge. New Yorkers can register by calling toll-free at 1-866-622-5569, via the web at www.consumer.state.ny.us
or by writing to the "Do Not Call" Registry at P.O. Box 2078, Albany, N.Y. 12220-0078.