Last week, the British newspaper, “The Daily Mail,” acquiesced in the face of a lawsuit filed by Sally Morgan, aka “Psychic Sally,” a talk-to-the dead medium and self-styled professional psychic. The paper agreed to pay £125,000 in libel damages and issued a full apology for running a story written by the British magician, Paul Zenon, which alleged that Ms. Morgan had relied upon concealed electronics in order to gain information used in a public performance of psychic readings and mediumship.

Here’s the story of the settlement and case as reported in “The Guardian”

Obviously this is a tremendous disappointment to skeptics everywhere, because many in the general public will take the judgment as some kind of evidence that Morgan is genuinely psychic. Of course there is no basis in the judgment for such an interpretation because the case was purely about whether the paper could prove that Morgan had used the alleged radio devices and hidden earpieces to gain information about her subjects. The case began when two women who were at the show in question later called into a local radio talk show and claimed they heard Morgan repeating information that they overheard in transmissions from the production crew’s headsets. Morgan immediately denied the charges and the venue eventually announced that the crew in question was a local house crew that was not on Morgan’s payroll.

Given what we know of the British libel system, albeit very recently reformed and legally improved, we might speculate that the paper decided that it was less costly to settle now rather than pursue the case in the courts, with an uncertain outcome. Then again, with the theater confirming that the crew in question was not in Morgan’s employ, it does seem quite conceivable that the assumptions made by the women callers were in error. It is simply sad to see someone who makes their living on the dubious claims of Ms. Morgan ends up being further rewarded beyond the already grotesque sums she makes portraying herself as a communicator with the dead relatives of grieving supplicants.

But I think there are also lessons to be had for skeptics in these events, beyond thoughts about the British libel system.

Skeptics – even skeptical magicians – can and have often been misled by their own complex theories about how phony psychics ply their trade. When Uri Geller first came on the scene, the noted magician and author Milbourne Christopher theorized that Geller was using corrosive chemicals on his hands in order to achieve his “psychic” spoon-bending. Christopher was an expert magician and a skeptic, but he was fooled by Geller, and concocted an elaborate but completely mistaken theory in order to fill the gap in his knowledge and understanding.

Similarly, the two women who thought that Sally Morgan was getting inside information relayed by her crew were doubtless sincere in their theorizing, perhaps because they did not believe that Morgan was psychic, but could not explain how she was achieving success with her readings.

It is natural for people who find themselves in these situations to construct elaborate theories of how psychics and magicians alike achieve their mysterious feats. I have twice been told that I had an electro-magnet in the ceiling in order to accomplish a card trick. And that’s just the tip of a career-long collection of extraordinary solutions.

Because the skills of phony psychics and illusionists are intended to be deceptive and concealed, it is difficult for people to grasp – sometimes to even begin to grasp – how such feats might be achieved. Ego and intellectual arrogance can also contribute to further frustrate the observer and lead them down a convoluted path. “I can’t be fooled by a simple trick” becomes a justification, if not a compulsion, to devise elaborate explanations for how someone might have been fooled by an anything-but-simple trick, and the complicated explanation is more satisfying to the bruised and frustrated ego.

Hence was perhaps born Randi’s longtime theory that when academics are issued their PhDs, the paper is secretly coated with a fine dusting of a special chemical that renders them unable, forever after, to utter the words, “I don’t know.” There is a lesson there for skeptics: Always be willing to say, “I don’t know.” The alternative can produce results that are foolish at best, and amount to a dangerous game at worst.

Occam’s Razor, often misunderstood, does not state that the simplest explanation will always be correct. This basic tool of critical thinking in fact advises that one should begin by considering the simplest method, and rule it out before upping the game to think about, much less embrace, the more complex solution. As the saying goes, “If you hear hoof beats, don’t think zebras – think horses.”

People indeed do regularly get fooled by “simple” tricks – simple means and principles – rather than the elaborate ones they might imagine. Sometimes it is because those simple illusionary principles are elegant in their purpose. But more often, the “simple” methods that magicians and psychics rely on would fool no one, without the elaborate psychological tools and skills that are used to build a simple trick into a successful but extremely delicate thing we call an effective illusion. Difficult to believe, but true nonetheless: the simplest explanation, when it comes to magic and psychic fraud alike, is not only the best place to start – it usually amounts to the truth.

And when it comes to psychics, the explanations are even simpler. Psychics and talk-to-the-dead mediums, other than those rare practitioners who use some kind of physical evidence for their claims (i.e., spoon-bending, drawing duplications, séance phenomena, and other such magic tricks), generally rely on little more than a lot of guesswork and a subject’s compelling desire to believe. Most people seeking guidance from a psychic are convinced before they ever walk into the reading or the performance. Those who are not yet convinced are wide open to the experience, often desire such an outcome to be genuine (i.e., based on a belief in the afterlife, for example), and lack the critical thinking tools to be able to adequately judge the evidence and experience being presented to them.

Professional psychics and mediums often rely on “cold reading,” that much is true, but in my experience, the bigger names in the field can barely even claim to be doing much of that in a skilled fashion. Psychics who work one-on-one tend to utilize more conventional cold-reading skills, using observation along with conversational techniques that invite a great deal of feedback from the subject. Subjects are in fact rarely even aware they are providing such feedback, and will deny having done so after the fact, and yet they do so to extraordinary degree, often speaking more than the psychic does in the course of a reading.

For an example of what I mean about guesswork, have a look at this clip of James Van Praagh. If this isn’t a lot of guessing – and wrong guessing at that – I don’t know what is. You certainly can’t call it cold reading. Cold reading works! Consider this:

But what happens at the end there when he suddenly gets some “hits” on one subject? Well, we can only theorize, and cannot by any means be certain – but there are three fundamental techniques used in psychic readings, consisting of the aforementioned universal readings (see, for example, “The Elusive Quarry” by Ray Hyman for an in-depth examination of this subject); cold reading (one excellent source for this subject is “The Full Facts Book of Cold Reading” by Ian Rowland); and finally, so-called “hot reading,” which is using specific inside information, often obtained secretly (certainly as far as the audience other than the subject is concerned, and often the subject does not make the connection between giving up such information and then subsequently hearing it out of the mouth of the psychic). There are countless examples of hot reading, but one notorious one would be seen in the work of the faith healer, Peter Popoff, exposed by James Randi for the use of secret radio transmissions to gain “hot” information about his subjects.

Was Van Praagh using a hot reading to guarantee a surefire climax to his miserable string of guesswork? Well, we might begin with the dictates of Occam’s Razor …

(And note to Mr. Van Praagh: I still have a million dollars waiting for if you care to prove your so-called powers. P.S. Not holding breath.)

I was once brought in as a consultant to a criminal investigation of a talk-to-the-dead medium. I took part in observing the medium’s work, as part of an undercover team. The prosecutor who launched the investigation wanted to see if we could prove that the medium was using “hot” readings, which would in turn potentially warrant fraud charges. But in the end, I saw no evidence that the medium, in public performances, needed to rely on inside information in order to achieve success with the audience.

Keep in mind that on television it is much easier to obtain some inside information and put it to use without detection. You can get information about hosts and guests you know in advance will be on the show. You can plant confederates in the audience. You can engage with the audience or crew or other talent before you go to broadcast and recording. The same mediums that need no such inside “hot” information for their routine public shows are perfectly capable of resorting to such inside information when the opportunity presents itself for television. And there is evidence in the public record (put forth by Michael Shermer and others) that indeed personalities like Van Praagh and John Edward have done just that.

So, are there are painful lessons in the settlement of the Sally Morgan libel suit? I think there are, but they are useful ones, too:

Psychic debunking requires special expertise.

Skeptics need to keep Occam’s Razor ever sharp and at hand.

And: beware the temptation to seek extraordinary evidence for ordinary claims.

Jamy Ian Swiss is Senior Fellow at the JREF. He blogs regularly at randi.org.