It doesn't take a Magic 8 Ball to figure out the forecast for troubled psychic star Miss Cleo and her companies: outlook not so good.
Her psychic hotline, which has been in hot water since February for fraud, harassment and questionable billing practices, has reached a settlement deal with the feds and has to cancel $500 million in customer bills.
Per the agreement with the Federal Trade Commission, Access Resource Services Inc. and the Psychic Readers Network Inc. must make also their pay-per-call numbers disappear and fork over a $5 million fine. Additionally, the companies have been instructed to return all uncashed checks to customers.
While Miss Cleo herself wasn't targeted in the FTC action, don't expect to hear her lilting accent anytime soon. According to the FTC, the Ft. Lauderdale-based companies are basically closing up shop, virtually ensuring that the already retired Miss Cleo and her supernatural friends will vanish from the late-night TV landscape.
"I'm no psychic, but I can foresee this: If you make deceptive claims, there is FTC action in your future," Howard Beales, the laugh-a-minute director of the agency's consumer protection bureau.
Despite the settlement, lawyers for Access Resource and the Psychic Readers Network refused to admit blame, saying the feds didn't give them enough time to de-mystify the charges. Attorney Sean Moynihan said the companies still run a small credit-card-charged subscription service for psychic readings.
The trouble starting brewing earlier this year when the FTC began investigating the tarot-card reader for fraud after receiving upwards of 2,000 complaints from irate consumers. In commercials, the heavily accented, supposedly Jamaican psychic promised free consultation on matters of life and love. But when callers dialed in, they were hit with $4.99-per-minute bills and unsavory dealings with snake-tongued "psychics."
The FTC eventually sued the two companies in February for what Beales called a "laundry list of unfair and deceptive practices."
The fed investigation came on the heels of several state probes into the psychic hotline. Last month, in a deal with prosecutors over unlawful merchandising practices, the two companies agreed to forgive $1.9 million in bills racked up by Connecticut denizens. Similar settlements have been reached in Arkansas, Illinois, Indiana, Kansas, Oklahoma, Pennsylvania and Wisconsin.
Meanwhile, a Missouri court in October sentenced the service's owners to probation and $50,000 in fines resolving a criminal case in that state.
Although Cleo wasn't named in the FTC complaint, Florida has taken on the purported crystal-baller, insisting she prove her claim of being a renowned soothsayer from Jamaica rather a clever faker named Youree Dell Harris from Los Angeles. The state also accused the companies she fronted of deceptive advertising.
During a deposition in the Florida case in June, Cleo (or Youree, depending on whom you ask) pleaded the Fifth and refused to discuss her birth certificate or paranormal prognosticating credentials.
In other words, she borrowed another Magic 8 Ball line: better not tell you now.