On Welfare and Not Psychic? New York Provides Training

New York Times, January 28, 2000
By Nina Bernstein

Late at night, when testimonials to "incredible psychics" flash across the television screen, the $4.99-a-minute soothsayer standing by the phone to "actually solve your problems" could be a welfare recipient recruited, screened and coached for the job by New York City.

The city's welfare department has been recruiting welfare recipients to work from home as telephone psychics since April. Fifteen people have been hired so far by a company called Psychic Network, said Ruth Reinecke, a spokeswoman for the Human Resources Administration.

Clairvoyance is not among the qualifications listed on the city's recruitment flier. Any public assistance recipient with a high school equivalency degree, "a caring and compassionate personality" and the ability "to read, write and speak English" can qualify for Psychic Network's "minimum starting salary of $10 per hour, plus bonuses," the flier says. Those interested are asked to call Business Link, a division of the city's Human Resources Administration that finds and trains workers from the welfare rolls, and to sign up for a group screening session.

"What if I'm not a psychic?" a caller to Business Link asked.

"They'll train you," the city employee who answered the telephone replied. Ms. Reinecke said that applicants were trained to read tarot cards by a representative from Psychic Network at the city's Business Link office on West 34th Street.

She refused to provide any other information about Psychic Network, citing a promise of confidentiality to participating companies. As part of Mayor Rudolph W. Giuliani's welfare-to-work effort, the city set up Business Link in 1995 to connect businesses that needed workers and welfare recipients who needed jobs.

About 3,400 recipients have been placed and about 160 businesses now participate, city officials said, many qualifying for wage subsidies and federal and state tax credits of up to $10,000 for each worker. The city does not investigate the businesses that participate to determine if they are in trouble with the Better Business Bureau, the Labor Department, the bankruptcy courts or the Internal Revenue Service, Ms. Reinecke said.

Instead, she said, the program leaves welfare recipients as free to choose an employer as any other job applicants. Efforts to reach the only Psychic Network listed in the current Manhattan telephone book were unsuccessful. The local number was disconnected in July, and the only street address given was one in West Palm Beach, Fla., where a variety of records show it to be the residence of a man, William B. Tide, who uses several names and has an unlisted telephone number.

But Janice Scott King, owner of a metaphysical bookstore called the Psychic Network in Pompano Beach, Fla., said that she had been bombarded with complaints meant for the other Psychic Network since Mr. Tide failed in several efforts to acquire her trademarked name and toll-free number. It was not clear yesterday whether the company that is hiring welfare recipients in New York City has any connection to Mr. Tide's operation. Ms. Reinecke would not identify the woman who contacted Business Link offering jobs with Psychic Network, and she said the woman turned down a request to speak to a reporter. There was also no evidence that the company that is working with the city has had any complaints filed against it. In federal, state and local agencies where investigators have struggled to curb abuses in the boom-and-bust psychic hot line industry, tracking a phone line to its source is a familiar problem. There are many parties involved in the typical pay-per-call transaction, like long-distance companies, direct marketers and bill collectors.

And in a field dominated by those who control the best late-night television slots, database marketing lists and expensive telecommunications equipment, market leaders with a changing array of names and affiliations have been accused of defrauding customers, creditors, employees and stockholders around the country, investigators said.

Investigators typically reacted with disbelief to New York City's welfare-to-work psychic venture, but an enforcement official with the Federal Communications Commission, where 40 percent of all complaints concern psychic pay-per-call operations, laughed uncontrollably, then begged for anonymity.

Self-described "genuine psychics" were not amused. "That is totally a scam," said the manager at Abracadabra Productions Ltd., a small Manhattan company that lists tarot, astrology, palmistry, Turkish coffee and tea leaves on its Web site. "Genuine psychics study for years," she said, refusing to give her full name. "The city should not be doing this. It's shameful." Speaking for the city, Ms. Reinecke defended the recruiting arrangement. "For those who performed in the job, the pay is rather good and it's attractive to be able to work out of the home for the mothers who have young children," she said.

But veterans of the telepsychic realm tell a different story.

Despite promises of $10 or $12 an hour, actual pay at these networks is often far less, because it is based on a per-minute rate paid only for time spent on the telephone with callers, said Judy Ann Cannizzaro, who has worked as a telephone psychic, taking calls from the Psychic Readers Network, the Fort Lauderdale, Fla., company that has dominated the field since the 1998 bankruptcy of Inphomation and its Psychic Friends Network, endorsed by Dionne Warwick.

An extra 25 cents is paid for every name and address that can be extracted from a caller, information that can be resold to direct marketers. Calls are automatically routed first to those workers who keep callers on the line the longest, with scripted ploys like pretending to see -- very slowly -- winning Lotto numbers.

"I've been a clairvoyant all my life," Ms. Cannizzaro said. "If I could get the lottery numbers, would I be working as a telephone psychic?" Most of the calls generated by late-night commercials are from poor people, she added, and though the ads carry a required disclaimer that the psychic reading is for entertainment only, many callers are desperate for otherworldly solutions to their real problems.

"I'm not going to keep a person who doesn't have money for bread on the phone at $5 a minute," she said.

Because the industry's hub is in Fort Lauderdale, Robert J. Buchner, an assistant attorney general in Florida, said he receives hundreds of complaints from around the country.

Most consumer complaints, he and other lawyers said, concern the practices called "cramming and slamming" -- the padding of a customer's telephone bill with charges they never knowingly incurred, and the switching of their long-distance service to another carrier without permission. Adam Cohn, a lawyer with the Federal Trade Commission, said the F.T.C. was on the verge of promulgating a new rule to make it harder for unscrupulous operators to avoid accountability. Under the rule, no company could try to collect a telephone charge unless it could show the consumer proof of its validity, like a signed agreement.

But veterans of the industry said that many of the major players had been able to cash in and move on despite earlier regulations aimed at cleaning up the business, while the workers at the bottom answering the phones were left with dwindling revenues and bounced paychecks.

"Welfare is probably going to be dealing with welfare," Ms. Cannizzaro said of New York City's psychic recruits, remembering predawn calls from a woman in the Bronx who had suffered a miscarriage, and from a drug-addicted mother who said she was going to commit suicide. "You're talking people with problems that not even a soap opera can list, and you're giving them to people who are only interested in $12 an hour."