This is a very contentious subject, especially coming from someone like myself. I really do feel that it has to be put out there, and some people I know might not like it, but that's life.
There may be some people who can genuinely 'talk to the dead', but if you can tell it's cold reading then you know that they're a fake straight away. If they don't ask you any questions then they're more believable. Having said that I love my tarot, I'm free to make whatever I want out of it without someone else pulling at my heartstrings.
Traditionally there are two types of reading: cold reading & hot reading. Cold reading is where you throw small pieces of information at the participant to 'hook' them in, and they're so enthusiastic to believe that they will start to (unintentionally) give answers from which the psychic can then add more general information to. They feed each other energy and excitement towards a delusional experience. Many people come away from the experience days later thinking "But they really weren't that accurate, they had very few hits." There are usually more misses than hits. More often than not if they don't have 30 people in a room to choose from they will have one person "I'm sensing someone in your family who's passed away, I see some letters A...N" then the readee jumps in "Allan, my uncle Allan!" then another handful of hooks are put out for the readee to latch onto.
The other type of reading is hot reading. This is less likely as it relies on the psychic having already had straightforward information from the readee, such as recorded information of the people speaking before they enter another room or, as per an experience of my own, having the reader stand off at a distance before her next reading listening in on our conversations about our beliefs etc... that's when I turned around and saw her standing in the vestibule listening to us talking on the balcony. I still wanted to believe too - it took me months to admit to my boyfriend that I'd caught her out in the act.
Some of these people might genuinely believe that they are capable and have had people bolster their 'talent' for many years. One in particular amazed me - a man who met my mother and pointed out some weakness points in her body: a bad knee & shoulder... which could later become sore thanks to the power of suggestion, but I still remain dubious. He also managed to be able to 'read' everything about her work situation at the time & how she could overcome it. Sometimes this kind of thing can be helpful, but when it comes to 'talking to the dead' I really draw the line. Some people are so desperate to be able to have that last chance that they will allow themselves to believe the psychic, then weeks later feel the emptiness of realising the ultimately there was too much cold reading involved for it to have been really that 'amazing.'
It has to be said aswell: why aren't these psychics able to see into the future so that we can help people? If they're so keen on helping people be at terms with their losses, why aren't they just counsillors? Why are they only looking back into the past and reading about people who have already gone - or do I not know enough about the nature of these kinds of abilities?
I just feel that I have a responsibility to draw the line with Wicca. It needs to be more practical & realistic with the most healthy approaches to thinking & practice. It is so easy for the Wiccan faith to become tied up in the fluffy arena of self help books & spiritual mumbo jumbo which gives it less gravitas. We are in a faith which since the Pagan Renaissance in the mid 20th century needs to be more grounded. It's great to be open-minded, to look at the possibilities and allow for the fact that science still has questions to answer as we explore the 'doors of perception' in our minds & work with Nature.
Please, if you have enjoyed what you've read so far, please advocate this cause because it is wasting people's money, time and emotions. Also, please watch the Penn & Teller episode of 'Bullshit' below which gives you a much more detailed picture than myself & Derren Brown's video also tells you how cold reading works.