Fortean Slips: Psychic Friends Debt-Work

How is it possible to go
bankrupt when you're
charging $3.99 for every
freakin' minute?!

Psychic Friends Debt-Work

by D. Trull
Enigma Editor
dtrull@parascope.com

Ah, the sweet, guilty joy of schadenfreude. Finding pleasure in the misery of one's enemies might be wrong, but damned if it ain't fun! A recent tumult in the world of the paranormal has granted skeptical curmudgeons everywhere an honest-to-goodness schadenfest, packed with exquisite sadistic thrills that might even rank up there with the ecstasy Bob Dole must feel every time he hears the word "Lewinsky."

Here's the ingredients for one glorious sob story: You've got a legion of telephone operators trained to pretend like they're fortune tellers. You've got half-hour commercials with Dionne Warwick on a couch drawing astronomical ratings, even in the 3 a.m. time slot. You've got an audience of tens of thousands eagerly dialing up psychic advice to the tune of $4.99 the first minute, $3.99 each additional minute. In the business world, this is what they refer to as a license to print money. What could possibly go wrong with a no-brainer scam like that?

Gee, I don't know. Call up the Psychic Friends Network and ask them. Somehow, mysteriously and miraculously, the grandmaster of 900-number commerce has declared bankruptcy.

PFN's Baltimore-based parent company, whose hideously silly name is Inphomation Communication Inc., filed for Chapter 11 bankruptcy protection on February 2, 1998. Ironically enough, they chose the date when another breed of dirt-dwelling vermin has long dispensed psychic predictions, except his are free. Inphomation listed its total debts as $26 million, dwarfing its claimed assets of $1.2 million. With Chapter 11 throwing a hex on its creditors, PFN will continue its normal operations while the company seeks to divine order from its shattered finances.

"They apparently made some bad decisions, and a couple of things happened that they had no control over," said James Olson, a lawyer for Inphomation.

Boy, it doesn't take clairvoyance to see that. Even though the Psychic Friends Network's revenues had leveled off from a peak of about $100-125 million annually, the hotline was still bringing in profits of about $25 million. What kind of "bad decisions" does it take for a business to go from there to bankruptcy? Forgetting to renew its contract with Satan?

The seeds of the Psychic Friends Network were sown in 1984, when the FCC quietly deregulated the maximum length permissible for commercials on broadcast television. Stations could now make an extra buck by selling chunks of odd-hour airtime for program-length advertisements, thus spawning the infomercial. The earliest infomercials primarily hawked crappy products palmed off as "amazing breakthroughs," until some visionary got the idea of an unholy union with that other fledging money-milking scheme, the 900 number. The popular sex chat lines weren't exactly suited for broadcast TV demonstration, so an alternative G-rated subject matter was needed, yet one which was just as irresistible and mindless. In 1990, the Psychic Friends Network went on the air.

Dragging Dionne Warwick from the dank bowels of celebrity oblivion, and promising to sort out callers' love lives and money problems in exchange for a mortgage-sized phone bill, PFN was an extrasensory success. This, despite the psychic hotline's many inherent ambiguities and conundrums.

First off, I could never figure out exactly what the name "Psychic Friends Network" was supposed to mean. Is the network the united group of "professional psychics," or is it a make-believe TV network that broadcasts the paid promotional messages from Dionne and the gang? Or both? And are the psychics friends with each other, or with me? If I'm not psychic, but I have a favorite psychic at the network who I call all the time, am I then entitled to describe myself as a "Psychic Friend"? And the biggest question of all: how do I reconcile the continual claims of genuine psychic powers and guaranteed results with the ubiquitous party-pooping disclaimer, "For Entertainment Purposes Only"? It's all so confusing. Maybe PFN's bewildering equivocalities are engineered to consign your higher brain functions to a mild catatonic stupor so you'll feel more like picking up the phone.

The Psychic Friends Network and its competitors definitely seem more concerned with the quantity of their profits than the quality of their prophets. Writer Stephen Glass posed as a phone psychic for a PFN imitator, the Psychic Believers Network (PBN), and related his insider's experiences in a hilarious and blistering expose in Harper's Magazine. Glass bluffed having psychic powers in a series of telephone interviews that turned out to be a rather undemanding screening and hiring process. "So many people call me talking with so many ain't's that I can't put them on the phone," one interviewer told him, grateful to find a well-spoken applicant. "Who cares if they're psychic, cotton candy. No one will think they're psychic."

Glass quickly learned that PBN's psychics were graded not on accuracy but according to the duration for which they could keep a caller on the line, and the number of "return customers" they could accumulate. He proved to be a natural at the psychic hotline biz, despite lacking the slightest psychic skill. Armed with a knack for improvising mystical-sounding balderdash and a few sly tricks to tantalize callers just as they get ready to hang up, Glass distinguished himself as PBN's rookie of the year with an average call length of 20 minutes (which Ma Bell translates to $80 a pop).

Initially Glass found his psychic career amusing, but then he became disenchanted with the inescapable immorality of the whole enterprise. The vast majority of his callers -- about 85 percent -- were looking for supernatural solutions to their money problems. Many didn't know how they were going to be able to pay the rent or buy food for their families, yet they willingly racked up exorbitant 900-number calls for meaningless psychic help. Attempting a more worthwhile alternative, one of the psychic hotline companies launched the Professional Advisors Network, which offered counseling from legitimate psychologists and therapists. The service was promptly discontinued from lack of callers.

Glass also calculated that over 74 percent of his callers were African-Americans, apparently in keeping with psychic hotlines' marketing efforts -- the infomercial hosts are almost always black celebrities (with the aforementioned Ms. Warwick joined by such fellow has-beens as Billy Dee Williams, Phillip Michael Thomas and LaToya Jackson), and the on-air testimonials come predominately from black callers. Glass reported that one internal memo from a psychic hotline said, "The average user of our service has less I.Q. We should focus on the black and Hispanic markets."

Even the phone psychics who claim to be real psychics are disturbed by their industry's skew towards minorities and persons of low income. Those working to unionize phone psychics list this practice as one of their primary grievances. "I feel they're hiring people just to get money and the vast majority are not psychic at all and are making things up just to keep people on the line," one psychic protested. "It gives us a bad name. It makes me ashamed of what I have to do."

This business has a lot to be ashamed about, but perhaps the biggest shame of all is that the Psychic Friends Network's current pecuniary tailspin will most likely be just a temporary setback. These days, it seems like filing for bankruptcy is about as inconsequential as an ingrown toenail for big corporations, and one might predict that PFN will be continuing its shady operations with barely a hiccup. The company has already seized upon the Internet as a whole new realm for psychic friendliness, with a web site (which, perhaps not coincidentally, was offline at the time of this writing) and online psychic sessions. There's no need for Dionne to be hoping for a Solid Gold revival just yet.

And yes, it's a hoot to laugh at their misfortune, and wax poetic on the company's financially and morally bankrupt condition. But the fact of the matter is, PFN wouldn't ever have had a dime to lose if they weren't giving the people what they want. Unless we all magically begin thinking with sense and reason, the Psychic Friends Network can look forward to a long future troubled only by busy signals.

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