Call Me Now! ...And Pay Me Later

With all the millions Miss Cleo brings in, her Broward-based bosses have little trouble paying their way out of those pesky lawsuits

Nor are state attorneys general the only ones willing to take on Miss Cleo. Nancy Garen, author of the popular book Tarot Made Easy, says she learned in July that ARS's would-be psychics were told to crib their readings directly from her book. Her attorneys, citing "unassailable" evidence from the Miss Cleo Websites that at least three-quarters of ARS's material was stolen directly from Garen's book, got a temporary injunction in October to halt the practice. Shortly thereafter, her attorneys say, Feder sent an e-mail to all of his readers requiring them to swear that they had never been asked to read from Tarot Made Easy -- even though they had previously been instructed to do just that, according to several ARS readers whom Garen's legal team interviewed.

Sebastian Gibson, one of Garen's lawyers, said in a sworn declaration that Youree Harris herself called him in September, pinning the blame on Feder and ARS. "Please tell Ms. Garen I am so, so sorry," Gibson says she told him. "I told them long ago, "Why are you doing this?'" He says Harris added that she "wants to hear what other lies they tell her." Garen is suing Feder and his companies in U.S. District Court in California for $250 million in damages.

ARS attorney Moynihan denies all these claims, saying that charges of deception against ARS are "nonsense." The company wants "happy people calling who enjoy the service," he says. "It's just for fun." Anyone who says otherwise is just trying to get a free call: "If it appears on a phone bill, first of all, the call was made, period," he asserts. There may be some mistakes, but that's due to the sheer volume of calls ARS receives: "You're talking about maybe 100 mistakes out of a million phone calls."

Fred Harper
Fred Harper


It might be expected that Florida's attorney general, Bob Butterworth, would be as active as any in pursuing the hundreds of consumer complaints about Miss Cleo, since the whole ARS crew lives in his state. Indeed, while Florida has never filed suit against Feder, Stolz, and company, the threat of action has been enough to force three signed agreements out of them since 1999.

The first of these was in response to complaints that callers weren't really getting three free minutes. The attorney general's office investigated by calling the lines themselves, says assistant attorney general Bob Buchner. "Every time we had tried it, it seemed like two and a half minutes was taken up by administrative questions. Since that complaint two years ago, the attorney general has checked again and each time has really gotten three free minutes of reading." The company also agreed to stop making ads that sounded as if the reading could be done in only three minutes. "As a matter of fact, they try to keep you on for at least 20 minutes," Buchner says.

A second round of complaints brought agreement from ARS to stop implying in e-mail and direct-mail ads that all callers would reach Miss Cleo herself. "In the past, they have made it sound like this is Miss Cleo personally, and that would be extremely unlikely," Buchner says. "Although she does take some calls, it would be like winning the lottery."

Youree Harris's bosses insist that she really thinks she's psychic, Buchner says. But they once claimed much more. They also advertised that she already had worldwide fame as a psychic, a claim they quickly dropped. "They were advertising in a way that made it sound like she had a previous worldwide psychic reputation, and she doesn't," he says. "We asked them to substantiate it, and they didn't even try."

Other ARS employees apparently had no such illusions about themselves. It was obvious they were simply reading from a script. They'd been hired through ads for telemarketers, while ARS advertised that it hired only the world's best psychics. Its TV ads also had actors giving glowing testimonials without revealing they were actors, Buchner says. "It looked like real people were actually doing this." That too was stopped by his second agreement with ARS.

The latest agreement, signed in fall 2001, requires ARS to abide in Florida by the terms of any agreements it makes in other states. But it deals mostly with the billing problems that have plagued the company for years: people who get bills for disconnected phone numbers or for calls they never made. The mistake is a result of ARS's aggressive collections, Buchner says with disapproval, and creates the company's angriest critics.

Although federal law requires the phone company to remove charges that consumers complain aren't legit, ARS doesn't give up that easily; its collectors go after the consumers themselves. "They do this reverse tracking procedure, and in doing that, they get a small percentage of those wrong," Buchner explains. "I'm guessing 1 percent of them, but when you're talking about 1 percent, you're talking about a lot of people." Collection letters and phone calls from ARS "threaten, and in some cases you could say harass, people," Buchner says, by raising the specter of litigation and ruined credit ratings.

ARS never really sues, Buchner says. And once its officers make an agreement with his office to stop certain tactics, they're good at abiding by it, Buchner admits. But consumers who gripe without official backup are met by a brick wall, he says. "All of these complaints, when they get to the government level, [ARS] resolves every one of them. Unfortunately, it may take that to get it done."

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