Regulators take on hot line for deceptive tactics

Staff and wire reports

Federal fraud fighters say Miss Cleo's psychic hot line should have seen it coming: A lawsuit accusing the service of rampant deception.

Describing the hot line as "permeated with fraud," the Federal Trade Commission said Thursday it wants to shut down Access Resource Services Inc. and Psychic Readers Network. The two companies in Fort Lauderdale, Fla., are behind the telephone psychic reading service advertised by mail, on television and the Internet.

Florida authorities announced a separate lawsuit, challenging the service's spokeswoman, Youree Dell Harris, known as "Miss Cleo," to prove that she really is a renowned shaman from Jamaica. Harris appears on national television commercials promising insights into love, money and other personal matters.

A person who answered a gate intercom at Harris' home west of Fort Lauderdale said she had no comment. An attorney for the companies, Sean Moynihan, said, "The only unfair and irresponsible practices involved in the lawsuit are those of the FTC."

The companies also have been sued by Arkansas, Illinois, Missouri, New York, North Carolina, Oklahoma, Pennsylvania and Wisconsin.

The FTC complaint, filed Wednesday, accuses the service of misdeeds including false promises of free psychic readings, tricky billing tactics to squeeze money out of consumers and unrelenting and abusive telemarketing calls.

"Considering the laundry list of unfair and deceptive practices in this case, it's a mystery to us why Miss Cleo and her employers haven't seen this coming," said Howard Beales, the agency's director of consumer protection. He said the FTC acted after getting more than 2,000 consumer complaints over the past 18 months.

Nixon's suits

Missouri Attorney General Jay Nixon said almost exactly the same thing late last year after he filed lawsuits against Access Resources Services Inc. for violations of Missouri's no-call law and consumer fraud.

The lawsuits, filed in St. Louis Circuit Court, allege 94 violations of the state's no-call list.

Moynihan said the consumer complaints are only a "handful" out of millions of satisfied callers and that the psychic service would fight the charges.

"If the FTC had only bothered to call, we would have explained that their allegations are based on erroneous information and a basic lack of understanding," he said.

Beales said the service promises a free psychic reading, but when consumers call a toll-free number they are directed to a 1-900 number charging $4.99 per minute. The fees add up after an initial free period of three minutes with callers usually on hold.

An average call costs more than $60, Beales said, noting that nearly 6 million people have called the service. A telephone bill that can run into the hundreds of dollars is the first sign for many callers that they are being charged. Callers who refused to pay had their credit ratings threatened, Beales said.

The psychic operators go to great lengths to make the calls last as long as possible, including inaccurately telling callers they will not be charged while on hold, the agency said.