Philosophical schools of thought in legal theory differ significantly on the legal legitimacy of activities such as fortune-telling, amulet writing, palm reading, psychic readings, mind reading, and all services based on claims of supernatural powers.
Libertarians argue for the legality of these businesses, claiming that as long as individuals voluntarily and willingly purchase such services without coercion or deception, the government has no right to interfere. In contrast, others contend that the so-called voluntary consent of customers—who are often victims—is obtained through manipulation or by exploiting their vulnerability and desperation. For example, although sick individuals may willingly pay amulet writers and energy healers, these activities should be criminalized because they clearly prey on the weakness and suffering of those in distress.

Generally speaking, the inherent deception and false claims in these activities raise the question: to what extent does such deception amount to fraud?

An additional complication is that deception and false claims are not exclusive to such activities — all institutionalized religions are based on similar unverifiable claims. For example, in Iran, fortune-telling, palm reading, and amulet writing are considered to fall under Article 1 of the “Law on Intensifying Punishment of Bribery, Embezzlement, and Fraud”:

“Anyone who deceives people by trickery and fraud into believing in fictitious companies, businesses, factories, or institutions, or by claiming to possess non-existent assets or powers, or instills hope in unreal matters, or frightens people of unreal incidents… is considered a fraudster.”

For a country with non-secular laws, hypocrisy abounds in the interpretation of this law. If instilling hope in unreal matters or frightening people of imaginary events is considered fraud, then all religious institutions in the Islamic Republic — including shrines — would qualify as fraudulent. A simple inscription like “Alms repel seventy kinds of calamities” on charity boxes is a clear example of “instilling hope in unreal matters.”

Even in a secular legal context, distinguishing between them is challenging, as both psychic powers and religious promises of salvation stem from similar paranormal claims. Therefore, the issue requires a nuanced discussion and cannot be resolved simply by outlawing such activities.
A more nuanced approach is to consider these activities legal, provided they are classified as part of the entertainment industry. For example, U.S. consumer protection laws stipulate that paranormal businesses must explicitly market themselves as entertainment. A few dollars paid for a tarot reading should be compensation for the time and effort spent entertaining the customer, not for providing valuable information about the customer’s future or destiny. Similarly, a séance can be considered a group entertainment activity, much like a magician performing tricks for an audience — not truly making a rabbit disappear.

Thus, the essence of fraud in these activities is not in instilling hope or fear about unreal matters, but in whether the business profits based on the claimed value of supernatural knowledge or outcomes. Such activities become fraudulent if the practitioner charges money specifically for the supposed intrinsic value of their predictions or the results of their actions (like prayers). However, they may rightfully charge for their time and energy — as part of providing entertainment or emotional relief.

Framing paranormal businesses within the entertainment industry has its merits. In entertainment, customers do not pay for the intrinsic value of information or tangible benefits of the service. Entertainment means spending time engaging with something that doesn’t necessarily offer material benefits. Watching a football match or playing a video game provides no tangible utility. Even a casino markets itself as entertainment, not as a guarantee of financial gain. As long as these activities remain within the realm of entertainment and profit from engaging customers, they remain part of individual economic freedom.

That said, deception remains inherently part of these activities. False claims alone do not make them illegal. A prayer writer may still claim the power of their prayer, or a traditional healer may truly believe that positive energy radiates from their hands. But the key question is: at what point does an unprovable claim cross into deceit and the exploitation of vulnerable people?

Laws in various countries attempt to regulate paranormal and pseudo-scientific practices through licensing and guidelines. For instance, a pseudo-scientific healer cannot claim that their chakra-balancing method is a superior alternative to scientific medical treatment. Still, the boundary between false claims, deception, and psychological manipulation remains blurry.

My proposed solution is distinguishing between generic and specific false claims. Consider these two examples:

1. “If you believe in prayer, I can write a powerful prayer for you.”
2. “Someone has cursed you, and the only way to break this spell is with a prayer I will provide.”

The first is a generic claim, as the business model is based on the customer’s pre-existing belief in prayer. The second is a specific claim, relying on the service provider’s alleged unique ability to neutralize a specific curse. The second case is rightfully considered fraudulent manipulation.

Though both claims are technically false, the first is based on the customer’s own belief system, while the second is entirely a trick and manipulation by the practitioner. Similarly, an energy healer should only claim that they offer services to those who already believe in energy healing — a generic claim. However, someone who claims to have cured dozens of cancer patients with their hands is making a specific claim, which is rightly considered fraudulent.

In summary, just as all commercial activities must be transparent about the services they provide, paranormal businesses can also remain within the legal framework if the payment is purely for entertainment or emotional relief — not for the supposed intrinsic truth or material benefit of their prayers or predictions (even if they claim it). This way, such activities can be recognized as part of the entertainment industry and individual economic freedom. They should charge for their time and effort, not for the supposed inherent value of the information or material/non-material benefits of their services.

Ultimately, my suggested method to differentiate between harmless false claims and manipulative fraud is distinguishing between generic and specific claims. In the generic case, the provider offers services based on the client’s own pre-existing beliefs. In the specific case, the service is sold based on a special claimed ability — making it manipulation and thus fraud.