Psychic Hotlines’ Financial Future Is Bright as Callers Flock to Phones

The Psychic Friends Network predicted that Jennifer Desjardins’ future would be full of money and happiness. It didn’t foresee the legal trouble she would face after running up $3,000 in charges to the telephone service.

Desjardins and two friends made more than a dozen calls to the Psychic Friends Network over a period of several days at a cost of up to $3.99 per minute, or about $240 an hour.

“They told us we were going to have money and good jobs,” said Desjardins, 20, of Torrington, Conn.

Desjardins and her friends are part of a growing audience for the phone psychics who claim to read mental vibrations through telephone lines.

“It’s a social phenomenon,” said Arthur Warwick, a psychiatrist at the University of Maryland School of Medicine. “People have a tremendous need for certainty, reassurance and spiritual connection. Those things are not found in real life. It’s a very eclectic age.”

But telephone industry analysts say it’s money, not spirituality, that is driving the toll-call clairvoyance industry. With an average call bringing in $40, it doesn’t take a crystal ball to see that psychic phone services are big business.

Mark Plakius, managing director of Strategic Telemedia, a New York-based market research firm, estimates the services are a $300-million-a-year industry. That constitutes one-third of the total “1-900” market, which includes services ranging from consumer help lines to phone-in polls.

“Psychic hotlines are the anchor of the 1-900 industry,” Plakius said.

Moreover, the psychic phone lines have powerful allies. Long distance carriers such as AT&T; Corp. and MCI Communications Corp. lend their collection muscle by including charges from 1-900 calls in monthly phone bills. The payoff for the long distance companies is millions in yearly revenue, Plakius said.

AT&T;, through its MultiQuest division, is reaping millions from the thousands of callers who want to hear about their futures. Plakius estimated AT&T; controls 60% of the billion-dollar 1-900 industry. MCI controls about 20%, he said, with smaller companies controlling the rest.

But long distance companies will not reveal exactly how much money the psychic networks bring in when compared to other 1-900 services.

“We consider that proprietary information,” said Janet Wyles, a spokeswoman for AT&T;’s MultiQuest. Wyles wouldn’t say which services AT&T; is working with, although analysts say the company has worked with several, including the Psychic Friends Network.

MCI spokesman Paul Adams had a similar reaction when asked about the financial impact of psychic services on his company’s 1-900 operations:

“Typically we don’t reveal what customers we have,” Adams said. “We do have companies like that as customers.”

But even though exact numbers are unavailable from long distance carriers and from the privately owned and operated networks themselves, it’s clear that pay-per-call clairvoyance is a big commodity, with the Psychic Friends Network leading the way.

Founded in 1990, the Psychic Friends Network brings in about $100 million per year, said Richard Dworman, editor of the Infomercial Marketing Report, a monthly industry publication. Psychic Friends Network is controlled by the Pikesville, Md.-based Inphomation Communications Inc., which produces late-night infomercials featuring Dionne Warwick.

“The thing took off like a rocket; it was at the right place at the right time,” Dworman said of Psychic Friends, which fields between 7,500 and 10,000 calls daily.

The network’s founder, entrepreneur Michael Lasky, has done well enough financially that he paid $500,000 for the baseball that slugger Eddie Murray hit at Camden Yards in Baltimore for his 500th home run.

“We were the first to do it right,” said Robert Hoffman, senior producer at Inphomation Communications. Lasky couldn’t be reached for comment.

The second-largest network, Psychic Readers Network, makes about $50 million in yearly revenue, Dworman said. Another service, Your Psychic Experience, has between $35 million and $40 million in annual revenue, he estimated.

Are the psychic lines helping people or preying on them? Dworman, who writes about the infomercial industry for a living, says they are walking a fine line.

“You are dealing with two paradoxical goals,” Dworman said of the psychic services. “One is to protect yourself legally and the other is to entice people to call.”

To wit, one such commercial begins with this glittering testimonial from Nichelle Nichols, who played Lt. Uhura on the original “Star Trek” TV series: “George Bloom called, and he won a fortune in the Florida State Lottery.”

Because they are protected by the 1st Amendment, the psychic lines can urge people to “just pick up the phone” as long as they also say the service is for entertainment only.

The psychic lines are required to display their rates in their advertisements. Callers initially are not charged, but are warned that if they continue the call, they’ll have to pay for it.

Some callers may end up with phone bills they can’t afford. But executives like Hoffman at Inphomation Communications aren’t concerned, as long as the Psychic Friends Network avoids scrutiny and the phone calls keep coming in.

“No one is holding a gun to their head,” Hoffman said of callers.

For Desjardins and her friends, the temptation proved too much. The young women, who made the calls last year from a friend’s house, were arrested on larceny charges after the friend saw his gargantuan phone bill and decided to turn the matter over to police. The charges were dropped when a payment arrangement was made in court. But even with the charges dismissed, the humiliation will last:

“It made me feel like a real jerk,” said Desjardins’ friend, Jennifer Garner. “The psychics were just telling us what we wanted to hear. It was really stupid.”

Psychiatrists say the popularity of the psychic phone lines is not surprising.

“If you consider that 25% of Americans believe in angels, it’s a logical consequence,” said Arthur Warwick, the psychiatrist. “There’s no angel hotline, and this is the next best thing.”