Sunday, March 5, 2000 | 9:06 a.m.
Psychic Bob wants to confess.
For three years he has been at the receiving end of the $4.99-per-minute Psychic Network phone line making stuff up.
Bob -- who says he is "in no way actually psychic" -- sometimes shoulders his receiver, gets lost in TV wrestling and forgets what the caller is rambling about.
Sometimes he lets his 15-year-old granddaughter listen on speakerphone, providing she doesn't laugh out loud. From his sixth-story apartment in central Las Vegas, 75-year-old Bob Simpson -- wearing golf pants and thick eyeglasses -- has taken thousands of calls from people around the continent who are seeking supernatural guidance.
Bob listens. And asks questions. And lies his head off. "I just say crap about their auras," he says. "And a bunch of s--t about Tarot cards."
In the mid-1990s, 900-line pay-per-call businesses -- particularly the stealthily operated psychic lines -- enjoyed unbridled growth across the nation.
But in recent years federal and state regulators and telephone companies have tightened the rules on the industry, ushering in talk of the end of the tele-psychic era.
Much of the business has moved to the Internet, and several of the industry's leading companies have collapsed.
For Simpson -- one of thousands of independently contracted tele-psychics who earn a few cents a minute while talking to customers -- the foreboding feeling that the end is near has caused a crisis of conscience. Sort of.
Recently, Simpson decided to tell the truth about tele-psychic work -- albeit not to the individual callers and not using his real name. Simpson says he feels guilty about the lies he's told -- but not quite guilty enough to walk away from the easy money.
His story sheds light on an industry that some say capitalizes on consumer confusion. For years, the debate between regulators and operators has been: Are consumers who get billed as much as $200 or $300 after talking to a "psychic" being entertained or misled?
Representatives of the industry say that tele-psychic services generally are upfront businesses that provide entertainment in exchange for a a clearly stated fee.
But Simpson's answer is, "It's a rip-off."
Becoming psychic
Simpson is a retired rubber-company chemist. He has a bachelor's degree in chemistry from Ohio State University. When his wife died from ovarian cancer in 1987, he was left with hundreds of thousands of dollars worth of hospital bills. In poor health himself, he needed a job that allowed him to work from home.
"So I saw an ad in the paper for a seminar about being an at-home phone worker, and I went. After a half a day in a hotel at a class, I got a certificate that said 'Master Psychic.' And right away the calls started coming," he said.
"So you pick up the phone and then you have to start lying like hell. Everything is a complete fabrication. Every caller gets the exact same reading. The idea is to keep them on the phone as long as possible.
"At first it didn't bother me, I figured if people were that stupid it's not my problem. My wife's sickness cost hundreds of thousands of dollars. I had to sell my business to keep her going, and I still owe hospital bills ...
"But now I think people should know about this business. I can't believe they keep calling."
Callers' concerns vary. Sometimes, it's something about being pregnant and single and unemployed, or something about a lost love, or a deep sense of worthlessness, or a pile of unpaid bills, or an upcoming parole hearing.
"One prisoner called me from the warden's phone while he was cleaning the warden's office," Simpson said.
He estimated that 70 percent of his calls come from women.
When he logs in each morning, he hears a recorded message from his manager, telling psychics to shoot for an average above 15 minutes per call, which translates into roughly $75 for customers.
"I do not feel that we are milking the public by doing this," the manager reassures her psychics on the recording.
If callers connect via the free 800 line, she says, "Give them (the 900 line number) and tell them if they call it, they will get 'some' free minutes. We don't know how much or how many, just say, 'some.' "
"You're doing a wonderful job," she tells the troops.
The Psychic Friends Network, the first and most famous 900-line company in the industry,became known through the TV marketing efforts of singer Dionne Warwick in the early 1990s.
Pikesville, Mass.-based Inphomation Communications Inc., which operated Psychic Friends Network, once had annual revenue of about $140 million. But competition from other companies quickly increased, and CEO Michael W. Lasky claimed that long-distance companies were keeping large amounts of its revenue against consumer charge-backs, or unpaid bills.
Inphomation Communications filed for protection under Chapter 11 Bankruptcy in February 1998, claiming assets of $1.2 million and liabilities of $26 million.
A slew of other celebrities have promoted 900-lines. In May 1999 the public was treated to the debut of the Paula Jones Celebrity Psychic Network, run by Boca Raton, Fla.-based Zodiac Group Inc.
The industry also got headlines last month when New York City's Human Resources Administration welfare-to-work program made a deal with the Psychic Network to hire welfare recipients as psychics.
Embarrassed by the press -- "New York City officials could sense it: the bad publicity, the worse jokes," wrote the Associated Press -- the city canceled the deal.
In Nevada, the state attorney general's office has prepared tips for consumers in response to a high number of complaints over 900-number bills.
"We do receive a lot of complaints about this industry," said Marshall Smith, spokesman for the Nevada attorney general's office. "Typically it is people who claim they didn't authorize the service or didn't understand that they would be charged what they were charged."
Regulations -- such as limits on misleading "free minute" offers and require disclaimers -- have driven the 900 psychic lines nationwide into a downward spiral, according to Laurie Rusnock, marketing manager for AT&T 900-line services in New York.
Downward spiral
"As far as the psychic businesses go, we're seeing a flattening out, or a downward turn. In recent years their industry hasn't grown, and you're seeing advertising cut back -- the infomercials that sell these numbers have significantly declined," said Rusnock. "And as we have made rules that eliminate consumer confusion, there has been a tapering off (of business). I would say that is a positive trend."
For telephone companies that profit from selling line usage and billing services to pay-per-call business, the decline in psychic companies isn't disturbing, because other industries are starting to purchase 900-line services.
"There used to be an image problem with 900 numbers. But that is changing, and there is significant growth in business use now," Rusnock said.
But Peter Stolz -- a veteran tele-psychic business owner and leader in the industry, said the business gets a bad rap.
Stolz is a former director of one-time industry leader Quintel Inc., and current president of Total Telecom Media, Inc., which operates Psychic Readers Network, among other companies.
In 1998 the Federal Trade Commission investigated Fort Lauderdale, Fla.-based Quintel for allegations of unfair and deceptive advertising.
Three telephone companies suspended billing Quintel's psychic lines because it was overwhelmed with customer complaints.
Quintel's stock went from $17 per share in 1997 to less than $2 per share in 1999.
Stolz said the industry has started self-regulating by giving consumers ample opportunities to understand their charges and hang up the telephone.
"There are thousands of Internet sites and many companies that do this," Stolz said. "We always put 'For adults and entertainment purposes only' on our ads. This is no different than seeing a psychic in person.
"Our psychics are all over the country, and they have to be experienced. They have resumes and sample readings," Stolz said. "Some can read Tarot cards and some have special sensitivities, or something from beyond, or are clairvoyant or whatever you want to call it. Some are just sensitive to people's energies and feelings and vibrations and things like that," Stolz said.
The industry's moneymakers are notoriously elusive -- the Associated Press wrote last year, "Trying to track down the owner of the Psychic Network could require the use of tea leaves ... "
Stolz said opposition to the industry is rooted in a variety of mind-sets -- from the religious to the wary.
"There are some religions that believe psychic stuff is tantamount to the devil. There are other people that just don't believe in it," Stolz said. "They feel like people are being ripped off.
"But if anyone is being ripped off, it's us. Forty percent of our callers don't pay. I'm not asking anyone to feel sorry for us, but in any other business, you walk in and you get a service and you then pay for it. Many of our callers don't pay," Stolz said.
"They have any number of lame excuses as to why they shouldn't pay. They say that no one in their home made the call, even though the call was made from their home. They say someone broke into their house and didn't do any damage and didn't steal anything but made a bunch of 900 calls," Stolz said.
Stolz said his company limits calls to one hour in order to increase the chances that the consumer will pay the bill. If callers get a steep bill for several hours of psychic talk, the company will likely end up writing off the call, he said.
"And it protects the consumer from talking too long," he said.
The service
For spending 1,693 minutes on the phone Simpson gets a paycheck that nets $296.
For being an excellent producer, he gets a perk: A deed to a teeny piece of land in Baja, Mexico -- a plot somewhere in the middle of an undevelopable quagmire, where there is no water or electricity, and no access roads.
His phone rings. He's sitting at his kitchen table in front of a bowl of fake grapes when he answers.
"My name is Bob, and I'll be your psychic adviser. I sense that fate made you call me today," Simpson says, working from a memorized script his trainers provided.
"Oh good, then I'm glad I called," says a woman on the other end.
He burns five pricey minutes asking for her personal information -- she gives her full name, complete address, date of birth, and occupation. She's a 49-year-old concert pianist and teacher in New England.
"I'm picking up three major auras," Simpson says. "I see a green aura."
"Oh really? I see that color around myself a lot."
"Yes, well, green is luck. You should enter a contest -- I'm not talking about the state lottery, but something like a supermarket sweepstakes. If you enter, you will win."
"Oh, that's great!"
"I'm also seeing a red aura. I'm sensing that someone has a crush on you."
"Oh good," the woman says. Then she tells her psychic all about a crush she has on a man she dated for a few months, but who hasn't called her since he took a religious pilgrimage to Mecca, Saudi Arabia.
"OK, I'm tuned into your psychic energies right now," he tells her. "I'm sensing that he is a very religious person."
"That's absolutely right! Yes! One of the first things he asked me when we started dating was whether I would consider praying five times a day. Then he bought me a copy of the Koran. But I'm not Muslim."
"OK. I'm sensing that there is something that might be troubling you." "Yes," she says. She wants to know if her beau, who hasn't called her in more than two months, could be interested in someone else.
"I would say yes, possibly he's met someone else."
"Do you think he's met another woman? A Muslim?"
"I feel that there were thousands and thousands of people in Mecca -- some women -- and that he is very religious, and that he may have met a religious woman, yes."
"I knew it! I knew it!"
When Simpson hangs up the phone, he laughs, then shakes his head and says, "I should probably quit this job."
Stacy J. Willis is a staff writer for the Sun. She can be reached at (702)-259-4011 or by e-mail at [email protected].
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