Garage door industry lashes back: Yellow Pages scheme, deceptive practices, price gouging have local businesses upset at former Marana mayor, Dex Media - The Explorer: Import

Garage door industry lashes back: Yellow Pages scheme, deceptive practices, price gouging have local businesses upset at former Marana mayor, Dex Media

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Posted: Thursday, December 15, 2005 12:00 am | Updated: 7:50 am, Thu Mar 24, 2011.

Ryan Stanton, rstanton@ExplorerNews.com

Dec. 14, 2005 - Rick Gray has been in business for six years, building his reputation as an honest garage door technician one customer at a time. He offers upfront price estimates at no charge, replaces broken springs for a minimal fee and does his job with a smile.

"I'm just a one-man operation," says Gray, who owns Discount Door Service in Tucson. "I'm the owner, chief cook and bottle washer."

However, a series of three-page ads that have invaded local Yellow Pages directories in recent years may be causing Gray's homegrown business some problems. Not only does Gray think ads in Dex Media's publications are inappropriately using his company's name, but they may be dragging his name through the mud.

"They're definitely affecting my business because they're using my name in their ads," Gray said. "I'm the only Discount Door Service in Tucson, but you'll notice in the Yellow Pages that there are other companies that put that at the top of their ad - or as the most prominent wording in their ad - without even supplying the name of their own company."

Gray doesn't know his competitor by name, but the ads he is referring to belong to former Marana Mayor Bobby Sutton Jr., a Dex Media ad salesman in Tucson, who owns A&A Garage Door Service Co.

The ads for A&A Garage in the past two Dex Media directories have prominently featured the alias "Discount Garage Door Service," the actual trade name for Gray's operation.

"I think it's underhanded and I think it's theft of my name and my services," Gray said. "And from some of the complaints that I have heard, they are doing very shoddy work and they charge enormous fees."

Sutton resigned as mayor of Marana in April, shortly after he was indicted by a federal grand jury on charges of conspiracy and attempted extortion. He ventured into the garage door business last year after handling a large advertising account for nationwide dealer Pete Stephens, who is notorious in the garage door industry for his deceptive Yellow Pages ads and bad business practices.

Sutton told the EXPLORER in a September interview for a related story that he knew little about the garage door industry before handing the Dex Media advertising accounts of Stephens, with whom he developed a close relationship. Seeing a potential to make a profit, Sutton bought out a portion of Stephens' operation last year and set up shop in Marana, Sutton said in September.

The industry is now fighting back against dealers like Sutton and Stephens, who have inundated telephone directories nationwide with large and sometimes deceptive Yellow Pages ads, practices that many say have given the industry a black eye.

"These huge Yellow Pages ads are enormously expensive, as anybody knows," said Tom Wadsworth, editor of Door & Access Systems Newsmagazine, the leading trade publication representing the manufacturers of the industry. "And these problem door dealers that are opening up and using this technique - to pay for these expenses and to make a good profit - are gouging the consumer and charging extremely high rates for parts and for repair services that sometimes are not needed."

Sutton's latest three-page ad for A&A Garage, found in the Dex Media directories that hit shelves in October, no longer feature his own company's name. Instead, the ad prominently features Gray's trade name displayed across an American flag, while another alias, "Tucson's Choice," is graphically inserted on several Ford trucks.

Gray said he's voiced his concerns to Dex Media and Arizona's Registrar of Contractors, though neither have taken steps to resolve the problem. Sutton's ads are not only deceptive, Gray said, but they also are tarnishing his good reputation because of the allegedly poor service A&A Garage provides.

"A lot of times people will have a complaint and remember 'Discount Garage Door Service,' and they just look it up in the White Pages and they find me," Gray said. "And they issue their complaint with me, and it's not something I even did. So, not only am I getting a bad name, but they're stealing business of mine."

Sutton, through his attorneys with the Piccarreta & Davis law firm of Tucson, declined to comment. The law firm, also an advertising client of his at Dex Media, is defending him against the federal government's allegations that he tried to extort money from Waste Management Inc. while he was mayor.

Calls to the local Dex Media sales office in Tucson were referred to corporate officials in Denver.

Corporate spokesman Jerry Brown said Dex Media expects its customers to advertise with the names they operate business under, and its salespeople are supposed to enforce those standards. Brown said Dex Media accepts advertisements into its books at face value unless it has suspicion to believe some sort of fraud is being committed.

"When we have reason to believe that there is something being done that shouldn't be done - either because it's fraudulent or dishonest or doesn't adhere to standards - that's something that we look at and will investigate," he said, though he couldn't comment on specific situations. "No one has a stronger interest than we do in making sure the ads in our books are accurate and honest."

The 'two-headed monster'

Wadsworth, who represents the Door & Access Systems Manufacturers Association, said he has tried to expose the deceptive practices of unethical garage door dealers for the past three years.

His magazine has written about the deceptive practices of Stephens, which were exposed during a Dateline NBC investigation in 2002 and were the subject of a $20,000 consumer fraud fine in Georgia last year.

In addition to finding that Stephens' company in Atlanta engaged in price gouging, the state's investigation found his Yellow Pages ads were deceptive and made several false promises. Ads that Sutton and Stephens have placed in Dex Media directories in Arizona are remarkably similar and contain almost all of the same elements that resulted in the consumer fraud fine in Georgia.

But nothing seems to be stopping Stephens, who now operates 18 garage door service companies from Phoenix to Seattle to Daytona Beach, Fla. And it appears Sutton is closely following in his footsteps.

"In spite of the negative coverage we've given to these problem dealers, he's growing by leaps and bounds. It's not shrinking," Wadsworth said of Stephens. "We're just like this nagging mosquito on his back and he's just continuing on with his operation and appears to be making tons of money off of gullible consumers."

According to some sources in the industry, Stephens had a business relationship less than 10 years ago in Atlanta with Brian Tindall, head of the nationwide franchise Precision Door Service. It's there that the two may have dreamed up their Yellow Pages scheme, which they each took to a national level after separating in the late 1990s, Wadsworth said.

"There appears to be what I would call a two-headed monster covering the country with this inappropriate approach to business, and one of those heads is Pete Stephens," Wadsworth said. "His tactics were exposed by Dateline NBC on national television in 2002 and his tactics were fined by the state of Georgia in 2004. And, from all indications, his tactics nationwide have changed very little - they continue to be a problem."

Wadsworth said Precision, which has more than 60 locations nationwide, may be trying to improve its image, but its practices appear to differ from franchise to franchise. Local dealers indicated that Precision was the first problem dealer to hit Tucson within the last six years, and that it has engaged in price gouging.

Phone calls to Precision were not returned. Attempts to reach Tindall and Stephens for comment also were unsuccessful.

In the same fashion that Stephens grew his operation, it appears Sutton is aiming to build a nationwide empire of his own. The A&A Garage call center he set up in Marana last year already dispatches calls to technicians in Tucson, Salt Lake City and Albuquerque.

Sutton's Web site indicates he plans to expand into five more metropolitan areas soon, including Kansas City, Mo., Portland, Ore., Orange County, Calif., Ogden, Utah, and his hometown, New Orleans.

Sutton's venture into the garage door world is expected to be the cover story in the January issue of Wadsworth's quarterly magazine, which is mailed to about 20,000 professional dealers and industry executives throughout North America.

"The reason we chose to cover the Bobby Sutton story was because it appeared the two-headed monster was about to become a three-headed one in that Bobby had started up an operation built almost exactly like Pete Stephens' operations," Wadsworth said. "And now that he has plans to expand from his three existing locations to five more - to make a total of eight - the third head of the monster is growing, and growing rapidly."

'Bad Bob's Yellow Pages Scheme'

Wadsworth published a story in 2003, ironically titled "Bad Bob's Yellow Pages Scheme," in which he details how certain dealers use deceptive and outright illegal tactics to make big bucks in the garage door business.

He said the problem took flight with the rise of large Yellow Pages ads, which allow anyone with enough money - sometimes more than $15,000 a month for each ad - to get prime placement in directories like those of Dex Media.

"It hurts sales to legitimate dealers because these problem dealers move into town and get the biggest Yellow Pages ads in the book, and the nature of the garage door business is such that Yellow Pages advertising is a very beneficial way to advertise your business," Wadsworth said. "You're selling a product the average consumer might need once every 10 years, so when people need garage door service, the first place they usually go is the Yellow Pages."

The first step to the Yellow Pages scheme includes setting up shop in a large metropolitan area where the dealer can target a population unlikely to know him, Wadsworth said. That way, even if the dealer creates some angry customers, he can still prey on hundreds of thousands of other unwitting consumers.

Many individual components of the scheme are not illegal, Wadsworth said, but when looked at collectively, the dealer's ads often show a pattern of deception intended to present the illusion of credibility and lure cus tomers into calling them.

"One of the things we're encouraging people to do is to listen carefully as to how the business answers their phone. If they answer the phone saying, 'Garage Door Service,' that should be a red flag," Wadsworth said. "There's nothing illegal about saying those three words, but what's going on here is the business probably operates under many aliases. And Bobby's business is no different in this respect."

Wadsworth said he encourages consumers to ask companies: "What is the legal name of your business and what is your street address?"

"If they can't answer those simple questions, we encourage the consumer to hang up immediately and call a dealer who knows his own name and knows where he is," he said.

Stephens and Sutton do not list street addresses in their Yellow Pages ads, nor on their Web sites. State records show that Sutton operates out of a small office in Marana and maintains a mailing address at The UPS Store near his home in Continental Ranch.

Deceptive dealers purposely refrain from publishing their business addresses to avoid warranty issues, Wadsworth said, adding that changing the company name routinely or operating under multiple aliases is another trick often used to evade unhappy customers.

"When something goes wrong with the service that his business provided, the consumer will call whoever installed this product or fixed this part and, if they're no longer under that name, then the warranty is useless because they can't track them down," he said. "The name changes and the phone numbers change, and it's a shell game."

Price gouging and the Dateline NBC investigation

Price gouging is often the inevitable result of costly Yellow Pages ads, which very few dealers in the garage door industry can afford, Wadsworth said.

"You've got to be making a ton of money off that ad to justify it. And how are they making that kind of money?" he said. "I really don't think in the garage door business they're making it legitimately by charging responsible prices for a responsible product."

Wadsworth said he believes Sutton's latest three-page ad in the Tucson directory costs close to $10,000 a month. That doesn't include his many listings in local area books or his smaller in-column ads, which promise, "We will match or beat any price in Tucson!"

Complaints filed with the Better Business Bureau this year suggest Sutton's business in Tucson may be developing problems. Two consumer complaints have been filed against A&A Garage in the last six months, one of which Sutton never responded to, leaving him in poor standing with the bureau.

In a complaint dated Oct. 18, an elderly woman wrote the bureau saying A&A Garage recently repaired the gears on her garage door and charged $232.94, a price she thought was too high.

"When I checked with a couple of my neighbors who had the same work done, they told me that they had been charged just under $100 (by a different company)," the woman's complaint reads.

The customer also wrote that, after checking with two other garage parts stores in town, it appears A&A Garage charged $119 for parts that should cost about $38 or $40. The complaint was never resolved, according to the bureau.

"I feel that I should receive a refund of AT LEAST $100 and an apology," the consumer wrote. "I WILL NOT be taken advantage of just because I am 75."

In another complaint dated May 31, a local resident said his wife contacted A&A Garage when their garage door was stuck in a half-open position. A technician identified as "John" came to the house within two hours to make repairs and charged them $373.90. However, 10 days later, the door malfunctioned again.

"After repeated phone calls over a five-day period, John finally responded and came out to the house," the complaint reads. "He was very arrogant and nasty with our friends and refused to repair the door … we felt that an explanation was in order on why his repair, ten days prior, went bad so soon."

Two other garage door repair companies in town indicated that A&A Garage's charges were at least double what they should have been, according to the complaint. According to the bureau, Sutton responded to the complaint and it was resolved.

"They know if they change a roller in the garage door, they can charge a gullible customer $20 for that roller when in reality they, themselves, are paying less than a buck," Wadsworth said. "And the customer will sit there and look at that steel part and say, 'Oh, that costs $20? Oh, OK.' They don't realize they've just been taken."

The tactics of Stephens' operation in Dallas were exposed nationally by Dateline NBC on Jan. 4, 2002, during an investigation that some say left a black eye on the industry. Dateline devoted its hour-long television program to exposing unethical practices of home repairmen, of which Stephens was arguably the worst offender.

Dateline used a home inspection expert to set up undercover situations in which homeowners contacted Stephens' AA Able Overhead Door in Dallas about simple problems that should have required quick fixes. Instead, the company vastly overcharged customers for work that didn't need to be done and, in at least one case, work it didn't even do, according to transcripts of the program.

In two cases, technicians replaced rollers, which were not the problem, inflating the bills up to $406 and $338. In another case, a technician charged a female customer more than $400 for parts she didn't need.

The program found that Stephens' repairmen get paid commissions based strictly on how much they bring in on the bills, which creates an incentive to price gouge. Technicians routinely tried to sell customers new rollers, "which in the garage door business, seems to be a quick, easy way to run up the bill," Dateline stated.

Dateline couldn't find a central office for AA Able, which changed its name shortly after the investigation. However, Dateline did find the company's entire staff regularly meeting at a restaurant in Dallas where a manager, according to the program transcript, urged his repairmen to, "Work those tickets so they stay high. Stay around $400."

The manager also encouraged his men to, "Use a little scare tactic: 'You know ma'am, I would hate for this door to crash on your brand new SUV.' That turns a $39 service fee into a good ticket."

In another scenario, one of Stephens' repairmen charged $129.88 for a new circuit board, though the original circuit board was never actually replaced. The customer was charged $301 when the only problem that needed fixing was a misaligned part.

Transcripts of the program indicate Dateline called an unnamed owner of the company - though it doesn't name Stephens - who said he wasn't surprised his repairmen cheated consumers because of the commission system they're paid on. The man said he fired one of his technicians for price gouging and planned to fire another the same day Dateline called.

According to the Better Business Bureau, Stephens' operation in Phoenix has received 17 consumer complaints since February 2003, the majority of which were related to customer service or billing issues. Wadsworth said it appears his bad practices aren't changing, and it's tarnishing the reputation of others.

"The problem is it eventually destroys the reputation of all the good guys that are out there," he said. "There's a lot of well-established hometown garage door dealers that, every day, do the right thing for the customer. But disreputable dealers use these Yellow Pages tactics to get in your garage and charge a lot for parts and services that cost very little."

What local dealers have to say

Local garage door dealers say they haven't had many run-ins with A&A Garage, which started last year, though most say the local Precision Door Service has price gouged consumers.

"With Precision, I know - because I've had guys in here asking for jobs that have worked for them - they just pressure them, and if they come back in with a ticket under $600, they're irate," said Lee Stanton, manager of The Garage Door Center in Tucson.

Stanton, who has been in the business 20 years, said he knows customers who were charged several hundred dollars by Precision for repairs his company would charge about a third of the price.

"They call them for a service call and they go out there and, instead of just a spring job, they sell 'em rollers and bearings and drums and cables - stuff that never wears out or almost never wears out," he said. "And they end up paying $600 for a $150 job."

Stanton, like other local dealers, said he cautions consumers to avoid being lured in by businesses that don't give price quotes upfront. Both Precision and A&A Garage advertise a guaranteed "service call" charge of $29.95 and $34.95, respectively, though that's only to get a technician out to a house, not for any labor.

"I know of times when they've charged a woman $310 for rollers that should have cost her $70," said Marty Thenhaus, a salesman for Sonoran Products, a Tucson business that sells garage doors and openers.

Gray, of Discount Door Service, said it wasn't long ago that he did some service work for an elderly lady who previously had her garage serviced by Precision. He said he quickly noticed some urgent problems with her springs that were overlooked by Precision, though the price his competitor charged was what most upset him.

"It turns out that they did what I would have charged $150 to $200 for and they charged her over $800," he said. "She's probably 90 and she was practically in tears when I told her what happened."

Calling on the Yellow Pages

While price gouging may be at work in Tucson, many local dealers are just as upset with Dex Media, which continues to publish what they consider deceptive ads.

They claim many of the ads placed by Sutton and another company in town, A-Authentic Garage Door Service Co., misrepresent the size of their operations, which shouldn't be allowed.

"I just don't like the unethical aspect," said Art Alcon, owner of the Overhead Door Company of Tucson. "It just bugs the guy trying to make a dollar to know he's getting burnt by companies like this, and then you have a corporation like Dex that'll be backing them up."

Local dealers say the Dex Media directory, because of its reach, is their preferred method of advertising. But the publisher's apparent failure to police deceptive ads is an ever-growing concern with them.

"You're in the Yellow Pages because you gotta be," Stanton said. "But there are so many people in that book now that it's unreal."

The local Verizon directory, which doesn't contain any three-page ads, does not feature most of the ads that dealers complain about in the Dex Media publications. Sutton's business advertises almost strictly through Dex Media.

"The problem is when these other guys buy up a double-truck or triple-truck ad and get at the front end of the Yellow Pages section, that destroys the exposure of the reputable dealers who have been in the community for years," Wadsworth said. "And the honest reputable dealers lose business to people who often perform bad work and grossly overcharge for what they are doing."

Alcon, who's been in the business 30 years, said Dex has allowed ads from other companies like Precision to infringe on the use of the well-renowned "Overhead Door" name, a trademark unique to his company in Tucson.

"Dex is a joke," he said. "They're rip-offs to the bone and I'm the guy that's getting hurt the most because I have always had the most expenditures next to these flake companies."

Alcon is paying about $4,800 a month for a two-page ad in the latest Dex Media directory, which has helped increase his revenue. However, he said, it doesn't negate the thousands of dollars he's lost to companies with deceptive ads.

"The person that keeps getting burnt on all this is me because my ad is always following these guys and I put in my ad longer than all those people combined," he said.

According to Dex policies, ads that jeopardize consumer or advertiser confidence in Dex Media are prohibited, including ads that are misleading or feature content in which "the company's name is not obvious." Sutton's ads appear to violate that policy.

"If a company believes that its trademark or any other legally protected names are being violated, they should talk to their attorney about that," said Brown, of Dex Media. "When it comes to naming of companies, we don't have any way of determining whether somebody has a legal right to use a company name or not."

Wadsworth said the industry, acting jointly, can have some clout in getting the telephone directory industry to do a better job screening advertisers and monitoring ads with false or misleading statements.

Chris Long, managing director of the International Door Association, which represents the dealers of the industry, said his association has tried combating the problem by adopting a stricter code of ethics for its members. However, only a handful of Precision dealers are members, while Sutton and Stephens aren't.

"I sincerely wish there was more we could do as a trade association to involve ourselves with some of these things but, unfortunately, that's just not the practice," Long said. "What we strive to do is to ask the consumer to think through when purchasing something such as a garage door or having it repaired."

Long said he's talked to several attorneys general's offices throughout the United States and many are looking into the problems. However, it's difficult to nab dealers on clear violations of law because they often know "how far to take things so they are not found guilty," he said.

Wadsworth said the Federal Trade Commission clearly states that it's up to an individual advertising medium to police the ads it collects revenue from, and the Yellow Pages industry needs to take notice.

"They need to get their act together and start policing what happens through their pages because quite frankly, in our industry, the Yellow pages industry, their name is mud," he said. "They have zero credibility with so many honest dealers and manufacturers throughout the country because they're doing what they're doing. They're selling anything to anybody and they're allowing them to say lots of things that shouldn't be allowed to be said."

But thanks to the state of Georgia, Wadsworth said, somebody is finally saying, "You can't do this."

"The bottom line is there are hundreds of consumers across the country who have been scammed hundreds of dollars worth of extraordinary and unnecessary charges because they got suckered in by a Yellow Pages ad that contained lots of deceptive information that the Yellow Pages publishers themselves allowed to be published," he said. "In my opinion, they hold a great deal of responsibility for this."

© 2014 The Explorer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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