By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
You can't hide from Miss Cleo. The self-proclaimed television psychic's grinning, beturbaned head pops up everywhere, urging viewers to call her now for free foreknowledge of romance, jobs, family matters, and health, all delivered in a vaguely Caribbean accent. Mass e-mails breathlessly urge recipients to listen to her visions and dreams, which she promises will change their lives. Her Websites ominously warn, "Miss Cleo is waiting!"
Miss Cleo's nationwide marketing blitz has made her instantly recognizable. Despite her omnipresence, the tarot-card-dealing Miss Cleo is more than reticent about her own background, whereabouts, and activities. When ambushed December 2 outside a shopping mall by reporter Carmel Cafiero of WSVN-TV (Channel 7), Miss Cleo would say only that she's from a family of psychics and that her first name is Cleomili. Her official biography, posted on one of her Websites, asserts that she was born in Jamaica.
The pop-occult icon is indeed here in South Florida. Her real name is apparently either Youree Cleomili Harris or Youree Dell Harris, born August 12, 1962. Her social security number was issued in California in 1978. A public-records search turned up a list of her possible former addresses going back to 1984 that suggests she shuttled back and forth between Southern California and South Florida. Some national newspaper accounts have identified Miss Cleo as a member of the Screen Actors Guild, but SAG's Actor Locate service was unable to find any record that Harris, or anyone with a similar name, was ever a member.
Attempts to learn further particulars from the mysterious Miss Cleo herself came to naught. Harris remains holed up in a rented house set well back on three acres of land near the end of SW 126th Avenue in the southwestern Broward County community of Southwest Ranches. It's surrounded by a fence; two "Beware of Dog" signs hang on the gate.
A dreadlocked, middle-age man in a flowing maroon shirt, speaking from behind Harris's front gate and surrounded by three large dogs, confirmed that she lived there but said any interview would have to be scheduled by a call to Harris's personal assistant, at a phone number he didn't have. (Neither did directory information or any other source New Times could find.) "How did you get her address?" he wanted to know. Harris's house is listed as the business address for Waghwaan Entertainment, the company she started in July 2001.
The world knows Miss Cleo, however, as the shill for a company not her own; Harris is the public face of the unmystically named Access Resource Services (ARS). Estimates by consumer protection agencies of ARS's yearly take range up to $400 million a year, funneled into Fort Lauderdale from callers nationwide. Much of that sum is undoubtedly sent back out to the legion of subcontractors who actually field most of ARS's calls, but a healthy percentage stays here in the pockets of two Fort Lauderdale men, Steven Feder and Peter Stolz, who have run a dizzying array of similar companies for nearly a decade: Psychic Readers Network, Open Horizons.com, Bahia Encounters, Oshun 5 Communications, and 16 others.
But not all is harmonious in this inbred corporate family. A series of legal troubles has brought Feder, Stolz, and their enterprises national notice. Their careers in telemarketing are littered with lawsuits from both consumers and former business associates. Yet the pair has managed to emerge from these imbroglios relatively unscathed, all the while juggling company names and swapping pitchmen. But though Miss Cleo's schtick is only cosmetically different from previous Feder/Stolz fronts, it seems that this marketing ploy may have worked a little too well. In the past few months, Miss Cleo's claims of free psychic readings and the billing practices of ARS have drawn the wrath of state attorneys general and consumer protection agencies across the country. Not to mention consumers themselves.
Judgments against ARS so far, however, amount to only a tiny fraction of the company's overall take. And since attorneys general have acted to stop only specifically deceptive practices rather than challenging the whole scheme, Miss Cleo rolls on.
Meanwhile, complaints about myriad ARS practices continue to pile up. This written complaint from one St. Augustine woman to the Florida attorney general last year is typical: "I rue the day I even placed even a 5 minute call to these money grubbing extortionists," she wrote. "I am disabled on a very fixed budget and refuse to submit to their thievery."
Feder and Stolz could not be reached to respond; repeated calls to their homes and office went unanswered. Sean Moynihan, a New York attorney and frequent mouthpiece for ARS, calls the legal response to ARS's methods "extraordinarily irresponsible" and "despicable," charging that such complaints are almost always the fault of a lying customer trying to defraud an honest company, abetted by an unscrupulous attorney general pandering to popular prejudice.
"What happens here is, a lot of times you get people who want to make value judgments for other people," Moynihan sneers. "They want to decide what form of spirituality you can practice, what form of entertainment you can have."
Feder and Stolz are hardly the first to cash in on the public's fascination with the paranormal. Astrologers, spirit mediums, magicians, and other prognosticators have plied their (usually lucrative, if risky) trade in every culture from ancient Egypt and Babylon through medieval Europe. But the modern Western world's supernatural fancies began in 1848 with two American sisters, Margaretta and Kate Fox. They claimed to be able to summon the dead, who would communicate with them in code by a series of rapping sounds. Their demonstrations baffled scientists for years, winning the sisters fame and fortune; but shortly before she died in the late 19th century, Margaretta admitted to producing all the sounds by popping her double-jointed big toe.
Still, they spawned legions of imitators with various claims and gimmicks. Many toured vaudeville theaters for years and grew rich. Many more, perhaps less skilled, drew the attention of debunkers like famed stage magician Harry Houdini, who made a second career out of unmasking mystical frauds.
The occult world of supposed psychics meshed with high-tech phone banks and targeted advertising in the early 1990s with the debut of TV infomercials for outfits like the Psychic Friends Network, hawked by singer Dionne Warwick, and the Kenny Kingston Psychic Hotline. As South Florida is a hotbed for telemarketing companies and various boiler-room schemes -- thanks to our transient, diverse population -- it only makes sense that some of the biggest psychic hot lines are based here.
The people at ARS insist that their psychics are genuine and eager to help, but their blizzard of advertising gives the impression of a classic bait and switch. Many of Miss Cleo's ads promise three-minute or five-minute tarot-card readings for free; many customers have complained that Miss Cleo and her bosses don't fulfill their promises, so New Times put them to the test. We dialed two different 800 numbers that Miss Cleo said offered three free minutes of tarot reading. We didn't get them. Instead, on both lines, a perky recorded voice ("Thank you for calling!") immediately announced, "We have decided to upgrade your status to preferred customer! This means you'll never have to dial another 900 number again for psychic time!" What this meant, it turned out, was that no free reading was forthcoming. We could, however, dial an international number and get charged as much as $7.53 per minute. "Don't hesitate another minute!" the voice told us.
We hesitated (to the delight of our editors). Thus, we didn't get our call routed through the Republic of Niue. The international phone number we were given included the AT&T access code for that nation, a tiny coral island in the South Pacific that has become a nexus for high-priced phone schemes.
Thousands of others do not hesitate to call the other side of the world for psychic advice; after the fact, some complain that, for such a high price, they expected to talk to Miss Cleo herself. In reality, the people who call her 800 numbers get shuffled out by a central phone bank run by West TeleServices in Omaha, Nebraska, to hundreds of independent subcontractors around the country, who make a few cents per minute on each call. (A memo filed in one lawsuit against Feder and company alleges that some of the psychic readers were homeless people hired through unemployment offices.)
An on-line ad for Oshun 5 Communications (another company owned by Feder and Stolz, run from the same address), which announces itself as "the nation's largest virtual call center," includes a script for prospective employees: "Work from home! Full time pays $15 per talk-hour!" It promises that "customers will never know who you are or where you are at any time. You will be answering the telephone and reading a short script that will appear on your computer. This is a great job for stay at home mom's & dad's [sic]."
The ad goes on to recite what the phone answerer must do to squeeze money from people looking for a free reading: "Upselling the club or international number if the caller hesitates on calling the 900 number. You must give great reasons why the caller should call NOW. Talk about how great the psychics are and how wonderful the reading will be. You must... sound as if you are saying the script rather than reading it."
The attached practice script offers $4.99-per-minute tarot readings, begs for credit card numbers, and pushes monthly half-hour sessions for $29.95. Apparently, marvelous powers like Miss Cleo's are available, if you've got the cash, by shelling out for her "authentic Tarot Cards inspired by Miss Cleo. Now, you too can become a Tarot master like Miss Cleo. All for just $24.95, plus $9.95 shipping and handling." If the mark's interest in psychic phenomena has faded, Miss Cleo's minions also sell magazine subscriptions.
Hinting at how much money is involved, the script also instructs operators on what to do if the caller has already spent more than $500 that month on Miss Cleo's wares. Once callers have been persuaded to dial a 900 line or turn over a credit card number, they are routed to "various independent psychics," as ARS co-owner Stolz wrote in a 1999 affidavit. He was engaged in suit-and-countersuit with one contractor who previously provided a stable of telephone psychics for ARS's parent company, Psychic Readers Network. "PRN and its subsidiaries have, for the most part, developed their network of psychics by entering into contracts with entities which PRN refers to as "bookstores' which, in turn, locate, hire and train psychics to answer the phone calls which come into PRN's 900 telephone lines," Stolz continued. So don't count on getting Miss Cleo herself, even though ARS insists that she actually takes some calls.
What expertise her personal callers may be getting, however, is another story. While individual beliefs in the efficacy of tarot cards and the existence of psychic powers may vary, many such telephone "psychics" -- working for Miss Cleo's networks and otherwise -- have freely admitted to making it all up. They use what are known in the business as classic "cold reading" techniques, practiced for generations by would-be seers, that involve making vague assertions, then zeroing in on what the listener wants to hear.
The methods used by ARS's legion of proxy phone-tenders are comparatively simple and well-known. But above them rises a confusing tangle of more than two dozen companies, all of which lead back to Feder and Stolz. It's obvious that they've done well since Miss Cleo was introduced in 1999. What's not so obvious is exactly how many people and companies are involved, what they all do, and how much they make. Miss Cleo herself provides no answers; her 20 or so Web addresses lead to four sites: one offering a free three-minute tarot reading, one pitching a $19.95 per month club of "Miss Cleo's Elite Circle Of Friends," one pushing a contest for a Florida vacation to meet Miss Cleo (called "Miss Cleo's Magical Journey"), and one for "Miss Cleo's Tarot Shoppe," where visitors can buy, buy, buy Cleo-related items, including T-shirts. None gives any sense of the scope of the operation.
Feder and Stolz, who are cousins, go back in Florida's corporation records to January 1993, when they founded the venerable Psychic Advisors Network, which quickly changed its name to Psychic Readers Network. Soon accused of giving worthless advice, they started a short-lived call-in line with actual counselors called Professional Advisors Network in January 1994. It lasted only 19 months, while PRN sailed on with celebrity pitchmen including Philip Michael Thomas of Miami Vice and actor Billy Dee Williams.
Feder and Stolz were joined in 1994 by Thomas Lindsey, who partnered with them in three now-defunct companies. Those entities telemarketed weight-loss and hair-care products, says Lindsey, who was reached by phone at his Fort Lauderdale home. Lindsey now says he wants to keep his distance. "For more than six years, I've had almost nothing to do with these guys on a one-to-one basis," he says; his last business partnership with them, First Choice Communications, dissolved in September 1999.
In 1995, Quintel Communications of Pearl River, New York, formed a partnership called New Lauderdale with PRN to market psychic phone services. Quintel then bought out New Lauderdale in September 1996, giving Feder, Lindsey, and Stolz shares of Quintel in exchange. In May 1997, Feder and Stolz formed Access Resource Services as a collection agency for Quintel/PRN. Although it soon became the leader in psychic hot lines, Quintel watched its business collapse in scandal during 1998, when the Federal Trade Commission investigated complaints from hordes of callers who said they were billed hundreds of dollars for calls they thought were free. Feder was a director of Quintel at the time.
Feeling the heat, Quintel changed its name to Traffix and sold the bulk of its psychic business in 1999 -- to Feder and Stolz. (Quintel also bought back its stock from Feder, Stolz, and Lindsey.) That's when Access Resource Services became a full-scale psychic hot line. Through PRN, the pair paid Traffix $6 million in royalties for the use of its psychic marketing gimmicks. Traffix still churns out the mass e-mails supposedly from Miss Cleo.
Between May 1997 and December 2000, Feder and Stolz set up 16 more companies for various marketing schemes; all of them, including PRN and ARS, are run from the same office: the 10th floor of the International Building at 2455 E. Sunrise Blvd. in Fort Lauderdale. Their nameplate on the building directory still says Quintel Communications.
The enterprising duo's corporate maneuverings have undoubtedly brought wealth, at least to Feder, a 51-year-old native of New Jersey. In the late '80s, Feder owned a comparatively modest condominium in Portofino on the Intracoastal in Fort Lauderdale, according to the Broward County property appraiser's records. In 1991, he moved up to a $635,000 house on NE 19th Street in Fort Lauderdale. In April 1996, he and Lindsey bought a three-story, $3.5 million mansion on Isla Bahia Drive, on the water in one of Fort Lauderdale's richest neighborhoods. In September 1998, Lindsey sold his half to Feder. Half a dozen cars can be found parked at Feder's mansion, including three late-model Mercedes and a 1957 Ford. Bobbing at the dock out back is a 27-foot Sea Ray.
The 54-year-old Stolz, also from New Jersey, lives more modestly. He owns a condo in the gated and guarded Point of the Americas complex on South Ocean Boulevard, on Fort Lauderdale beach. He and Lindsey bought it in September 1995 for $335,000. In March 1998, Lindsey sold his portion to Stolz. The property's 2000 assessed value (which is less than its probable market price) is $441,410. Just last month, Stolz took out a $125,000 second mortgage on his condo. The lender: Traffix, formerly Quintel Communications.
During his rise to riches, Feder experienced some odd money troubles, as county court records show. In 1990, he was ordered to pay about $33,000 for an old debt and unpaid taxes, which he eventually paid. In October 1999, he and several others bought a condo in Oakland Grove Village, but less than a year later, First Union Bank foreclosed on the property, having never received a single mortgage payment. (Summons servers found the condo empty and couldn't catch Feder at his Isla Bahia home.) And in August 2001, Feder was sued for more than $17,000 he owed for glasswork done on his house; he paid this debt as well.
But most of Feder's legal troubles have come from his business associates. In October 1997, Boca Raton residents Kathy and Ronald Alarcon, owners of Psychic Solutions (a subcontractor for PRN), sued in Broward Circuit Court for money they claimed Quintel, PRN, Feder, and then-partner Lindsey owed them. Quintel and PRN countersued, and all parties reached an undisclosed settlement. Both suits were dismissed in March 1999; Kathy Alarcon says she's no longer in the psychic business and refused to comment further.
In December 1997, PRN was also involved in a suit/countersuit with another of its subcontractors, Great Referrals Network. That case was also settled confidentially in September 1998.
And perhaps Miss Cleo should watch her pennies closely: Her predecessor as TV barker for Feder, Philip Michael Thomas, sued his ex-employers in 1998, alleging that they were cheating him out of his cut. During the year he made commercials for PRN, Thomas was promised 3.5 percent of the take instead of a flat fee. But he got no accounting to prove that he was receiving the full amount. He got suspicious when his income went down while PRN's profits continued to rise, and he sued in Broward Circuit Court for $400 million. A 2000 attempt at arbitration failed; the suit is back in court. Thomas's attorney, Willie E. Gary, could not be reached for this story.
A different kind of scandal erupted in April 2000, when former PRN employee William Tide, who had started a competing psychic hot line in West Palm Beach, was charged in Broward Circuit Court with threatening Feder's life and stealing his customers. Tide responded that Feder was harassing him with phone calls and faxes and threatening his girlfriend. In January 2001, Tide was convicted of violating a restraining order to stay away from Feder and sentenced to 151 days of house arrest plus 13 weeks of anger-management counseling.
Mystik Magik, a PRN subcontractor in Anaheim, California, sued in July 2000 in Broward Circuit Court, claiming that PRN went behind owner Faith Groves's back to recruit her stable of psychics directly, then dropped its contract with Mystik Magik. That suit has also been settled. The phone numbers given in court documents for Groves, Mystik Magik, and her attorney have all been disconnected, and no new numbers are listed for them.
Dwarfing the lawsuits in which Feder and Stolz have been entangled are the hundreds of customer complaints of chicanery and false billing. Most state attorneys general do not release their complaint files or do so only with names removed. But the records of Florida's attorney general, available under the state's government-in-the-sunshine laws, contain enough complaints from across the country to fill several file boxes.
Linda Harris of Carson City, Nevada, says she really expected to talk to Miss Cleo. She also expected to hear a beep on the line when her free minutes were up, as promised in a recording before her reading began, and then have three seconds to hang up without charge. Neither she nor her tarot reader heard a warning tone, she writes in her July 22 complaint. Then she got a bill for $143.25 for a 23-minute call, a rate of $6.23 per minute -- far above even the $4.99 Miss Cleo quotes in her ads.
After Susan Davis's 14-year-old daughter called ARS's psychic line, which is limited to those over 18 years old, Davis called to dispute the $39.92 bill. (Davis's daughter claims she was transferred automatically from an 800 number to a 900 number, an illegal act that ARS emphatically denies.) The woman Susan Davis reached certainly wasn't the jolly Miss Cleo. "She began cursing at me and told me "they would get me' and then slammed the phone down!"
That threat sounds familiar to ARS customer Phil Leeds. "I received an unsolicited e-mail from Miss Cleo regarding a free 7-minute psychic reading," writes Leeds, of Fort Lauderdale, on November 13. He called and after several minutes on the phone got worried that he would be charged. So he asked his "psychic operator" for a number to call in case that happened. "She told me to hold on while she retrieved the number. Several more minutes passed before I realized that I was being kept on the line purposely and hung up," he writes. Sure enough, Leeds soon got a bill for $49.90. "I tried numerous times to contact the Miss Cleo offices but was given an 800 number which told me to dial another 800 number and so on and so on. Finally, I got a local number, which I called and got an answering machine. I left several messages. Needless to say, I never received a response.
"I started receiving automated collection calls at all hours of the night and day. I tried calling the number back but either got a busy signal or fax line. I then received a collection notice in the mail with a phone number! I called the number and finally spoke to someone. The moment the man answered the phone, his only response to anything that I said was "are you paying by credit card or check.' He became very belligerent and irrational and ended the conversation by saying "If I don't get a call back by 2:00 with payment we are going to fuck up your credit' and then hung up!"
Such unpleasant tactics seem especially ironic when compared with the dunning letters ARS sends out. Jose Rodriguez of Boynton Beach complained September 21 that he'd gotten a $479.04 bill for a call from a number he hadn't had in a year. In large, bold type at the bottom of his collection letter is what could be an ironic motto for ARS's marketing and collection techniques: "Taking responsibility for your actions is an important step in your spiritual journey."
A raft of similar complaints over the past two years has prompted a growing band of state attorneys general to respond to ARS's tactics. Now, seven states are suing ARS, alleging a variety of misdeeds: letting callers eat up their "free" reading time on hold, switching callers to pay lines without telling them, promising gifts that never materialized, and billing minors without parental consent. The collection service for ARS has also sent bills to people who never called psychic lines, bills for numbers that recipients never had, and even bills to the dead. Speaking for ARS, attorney Moynihan maintains that all such calls were really made and that callers are just trying to weasel out of paying by bashing Miss Cleo. "Because Miss Cleo is a very topical, very controversial type of person, I guess there's a lot of political pressure to bring lawsuits against her," he says.
The company's major trouble began in December 1999, when North Carolina Attorney General Mike Easley filed suit in Wake County Superior Court after receiving complaints from 80 people that ARS billed people hundreds of dollars for calls that were advertised as free. North Carolinians also complained that what free time they did get was spent on hold and that they got demanding collection letters for phone numbers that weren't theirs. ARS agreed to pay the state $58,600 in June 2000 to settle the case, plus any claims above that amount from the more than 8000 North Carolinians to whom ARS sent collection letters.
Pennsylvania filed next in November 2000, suing several "psychic entertainment" businesses, including ARS, for charging up to $700 for supposedly free psychic readings -- sometimes for longer calls than were shown on customers' phone bills. Even after customers disputed the charges and had them removed from their phone bills, ARS continued to send harassing letters. The suit in Cambria County Court of Common Pleas seeks refunds, an injunction against such practices, thousands of dollars in fines for each illegal act against a person over 60, and "the forfeiture of all profits derived by the defendants as a result of their alleged illegal business practices." The injunction was approved in November 2001; the case as a whole is set for a hearing in January 2002, says Barbara Petito, the Pennsylvania attorney general's deputy press secretary.
Missouri Attorney General Jay Nixon was next in line. He filed suit in St. Louis City Circuit Court against ARS in July 2001 for violating the state's no-call list some 100 times. In August, ARS paid $75,000 in fines. Nixon also filed a second suit in Jackson County Circuit Court for various consumer-fraud violations -- including the by-now-standard complaint that people who were billed never called at all and didn't even have the correct phone numbers. "We also believe there were misrepresentations made about what services were free," says Scott Holste, spokesman for the Missouri attorney general. That suit is ongoing.
More than 200 complaints piled up in Illinois Attorney General Jim Ryan's office before he filed a lawsuit in Sangamon County Circuit Court against ARS in October 2001. "As of now, the defendant has not answered, but we have spoken to their attorneys," says Elizabeth Blackston, Illinois's assistant attorney general. About 70 more complaints have arrived since the suit was filed.
"You dial this 800 number and they give you this 900 number to call," says Blackston. If customers do dial a pay number, they spend all of their "free" time on hold or answering preliminary questions, she says. "The clock is running, one way or the other, while they are on hold."
Nasty and threatening collection letters also went out to people for calls they never made, on phone numbers they didn't have. "The collection letters were really troubling," Blackston says. If people want to get off ARS's call list, they have to listen to an extremely long recorded message to get a (toll) number to call for that purpose. The lawsuit seeks to stop such business practices, get restitution for Illinois consumers, and impose a fine on ARS.
At the end of October, the New York State Consumer Protection Board slapped ARS with a $224,000 fine for 112 violations of that state's no-call law, and more reports are still coming in.
Kansas is investigating the same sort of charges that ARS faces in other states. As of November 8, the attorney general had gathered 179 complaints about ARS and several of the other companies Feder and Stolz run from the same location, says public information officer Mark Ohlemeier. Feder and Stolz have settled 135 of those complaints, he added.
The biggest blow has fallen in Arkansas. Attorney General Mark Pryor accused ARS in Pulaski County Chancery Court of the same practices other states have condemned: billing for supposedly free calls, charging for time spent on hold, violating the state's no-call law, and billing people who'd never called Miss Cleo at all. In November, ARS agreed to write off a whopping $3.2 million in bogus bills from 2000 and 2001.
Most recently, Wisconsin Attorney General Jim Doyle joined in, jumping on the legal bandwagon December 5, with a suit in Milwaukee County Circuit Court naming ARS, PRN, Feder, and Stolz. Lest other attorneys general think their suits solved the problem, Doyle reported about 200 complaints alleging the same old things: charging for supposedly free calls, keeping callers on hold throughout their free time, and billing people who never called. The suit seeks fines, restitution, and an injunction against such acts.
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."
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."
None of the litany of complaints against ARS is really the company's fault, Moynihan maintains. Instead, he blames all the company's troubles on religious prejudice against psychic powers, political grandstanding by attorneys general, and racial hatred against Miss Cleo for being a successful black woman.
Economic and political issues aside, Butterworth didn't want to wade into whether any ARS employees really have paranormal powers, Buchner says. He was satisfied with getting the phone answerers to sign a statement alleging their own belief in their psychic abilities.
"I wouldn't pay $5 a minute, and I don't think any consumer should," but that doesn't make psychic hot lines illegal or inherently dishonest. Buchner doesn't think it's possible to prove whether psychic powers are real, so his office (like other attorneys general) disputes only deliberate deceptions (for which his office has also cited well-known companies including Sears, Roebuck and Co. and Best Buy, he says). But given the disparity between ARS's income and the penalties it has paid so far -- perhaps 1 percent of its take last year -- Miss Cleo may be grinning for years to come.