© 2005 Door & Access Systems
Publish Date: Winter 2005
Author: Tom Wadsworth
If you have ever been frustrated with your Yellow Pages rep or had problems with a disreputable dealer in your area, you will find this story enlightening and compelling.
Why? First, it gives a rare glimpse of the inner workings of a Yellow Pages publisher and how its sales system can be abused to favor some door dealers and disfavor others. Second, this story (and our Atlanta Dealer story on pp. 52-53) demonstrates how the number of deceptive door dealers may be growing, not shrinking.
No one benefits if we all turn a blind eye. Our goal is not to carelessly point fingers, but to identify a problem and offer solutions (see p. 54) that benefit the consumer and protect the good name of our industry.
Trouble in Tucson
The Mayor, the Yellow Pages Exec, and the Door Dealer
By Tom Wadsworth, Editor
On Sept. 28, 2005, the Explorer newspaper of Tucson, Ariz., broke a major story that revealed a long list of allegations against a new garage door dealer in that area.
Door Dealer à Mayor
That fact alone got our attention. But the identity of this door dealer made this story compelling. He was Bobby Sutton, Jr., who had been mayor of the fast-growing Tucson suburb of Marana since 1999. On April 30 of this year, Sutton resigned from office amid federal extortion charges against him. (The extortion charges are unrelated to Sutton’s door businesses.)
Mayor à Yellow Pages Exec
But that’s not the most interesting part. For 10 years, Bobby Sutton has been a Yellow Pages sales rep for Dex Media, a publisher of 269 directories in 14 western states. One of Sutton’s big revenue-generating customers has been Peter J. Stephens, a multi-state garage door dealer whose giant Yellow Pages ads have become notorious throughout the country.
Yellow Pages Exec à Deceptive Door Dealer
In January 2002, Dateline NBC exposed overcharging tactics at Stephens’ operation in Dallas. In July 2004, the state of Georgia fined Stephens’ Atlanta operation $20,000 for “unfair and deceptive business practices” (see Atlanta Dealer story, pages 52-53). These deceptive practices were largely based on his Yellow Pages ads.
But, back to Bobby Sutton. Apparently impressed with the income potential of Stephens’ operations, Sutton bought out Stephens’ door businesses in Tucson and Salt Lake City in 2004. These operations appear to use several business names, and his Yellow Pages ads seem to have inherited the tactics used by Stephens.
Yellow Pages Firm à Racketeering Lawsuit
There’s more. Sutton’s handling of the Stephens account enraged several co-workers at Dex Media. A racketeering lawsuit, filed against Dex Media in a Phoenix federal court in September, appears to focus on the internal handling of accounts at Dex.
We tried to talk to Sutton to give him an opportunity to explain his side of the story. We faxed him twice, sent e-mails to his e-mail addresses, and repeatedly called his business number at Dex and his cell phone, leaving numerous voice mails. But he never returned our calls.
Since Sutton wouldn’t respond to us, we talked to the reporter who spent months on the story. The reporter is Ryan Stanton, a staff writer for the Explorer, and his article was titled, “Former Marana Mayor’s Ad Sales Led to Garage Door Business Venture.”
An Interview With Reporter Ryan Stanton
How did you get involved in the Bobby Sutton story?
My beat covers Marana, one of the fastest-growing towns in Arizona. On April 22, when Marana Mayor Bobby Sutton Jr. was indicted by a federal grand jury on charges of conspiracy and attempted extortion, it was naturally my job to write that story.
On the April afternoon when that story went to press, I received an anonymous phone call from a Dex Media sales employee who claimed that Bobby was engaging in a wide range of unethical behavior in his day job at Dex. The employee claimed that Bobby’s manipulation of account records resulted in a significant inflation of his commissions on garage door ads, which I later found out he was selling to Pete Stephens.
I was skeptical, but after a few conversations with several Dex Media employees and a sit-down session where we reviewed Bobby’s Yellow Pages accounts, our newspaper was convinced that there was something worth looking into here.
What finally prompted you to publish the story?
The story became more significant when we found out that Bobby had taken ownership of Stephens’ garage door operations in Tucson and Salt Lake City and set up shop in Marana. All things aside, that was a story in itself.
We soon learned that a racketeering lawsuit might be filed against Dex because certain employees were allegedly improperly enriching themselves. But we decided to hold the story until the lawsuit was filed.
Later, we learned that attorneys from the National Right to Work Legal Defense Foundation had looked into the racketeering case for more than six months and found that it had some merit. The suit was filed in mid-September. That’s when we decided it was time to go to press with a story of our own, tying in the garage door business venture.
Have any of the details in your story been challenged or questioned by anyone?
Almost immediately after our stories hit in September, we were inundated with responses, including feedback from several more sources inside Dex Media who reaffirmed what we reported. They basically said, “Thanks for getting the word out.” No one called to challenge the details, and a few actually claimed to have more examples of unethical behavior going on inside the Tucson sales office.
It really is a complicated situation when you’re talking about not just the practices of a service business, but also the practices of the salespeople who handle that business’s Yellow Pages ads. That’s part of the reason we waited five months before going to press – to make sure we had our facts straight on this.
How did you learn that Bobby Sutton handled Pete Stephens’ accounts?
We reviewed dozens, if not hundreds, of records of Bobby’s personal Dex accounts. Those records detail nearly every daily action on each ad going in the Yellow Pages, such as phone numbers being disconnected, billing adjustments, etc. Bobby’s name was listed on every one of Stephens’ accounts.
When I called Bobby, he told me that he had been handling Stephens’ accounts, and when he saw a potential to make a profit, he decided he wanted to get in on the (garage door) business.
Did you know that Dateline NBC exposed one of Pete Stephens’ operations in Dallas in 2002?
I read about the Dateline exposé online. From what I heard about the Dateline story, it seemed to be along the same lines as the state of Georgia’s case against Stephens (see related story, pages 52-53).
How did you learn that Sutton purchased Stephens’ Tucson and Salt Lake City businesses?
When we talked in August, Bobby said he approached Stephens about the possibility of taking over the Tucson and Salt Lake City markets. It appears now, according to his company’s Web site (www.garagedoorserviceco.com), that he’s set up shop in Albuquerque and is expanding into five more cities in four other states (Ogden, Utah; Portland, Ore.; New Orleans, La., Orange County, Calif.; Kansas City, Mo.).
Did Sutton indicate what he knew about the garage door business?
Bobby said he really didn’t know anything about the garage door industry until he began handling Stephens’ accounts. He said it was only after developing a close relationship with Stephens that he saw the potential to make a profit. Bobby also said that he was always on the lookout for potential business ventures, and this one caught his eye.
Did Sutton admit that he uses the same Yellow Pages ad tactics used by Stephens?
Bobby’s three-page ad in the last Tucson directory is almost identical to Stephens’ three-page ad in the Phoenix directory. The only difference seems to be that they use different company names and different telephone numbers.
When I asked Bobby about the ads, he said, “It’s tough but that’s the marketing scheme that works. You go get as many people to call as you can, you provide good service, and hopefully it turns around for you.” But it looks like part of the scheme also includes ramping up the ads to look like he has a larger operation than he might really have.
When Bobby first started his garage door business (in late 2004), I understood that its name was “A&A Garage.” However, in the newest Tucson directories that hit shelves last month (October), there’s no more “A&A Garage” shown in the ads. He now has a three-page ad for “Discount Garage Door Co.” that depicts trucks with the name “Tucson’s Choice.”
How did you learn that Sutton might be guilty of “heading jumping” with garage door ads?
During a period of five months of talking to many Dex salespeople, I learned a lot of the lingo used in the Yellow Pages industry. One of the tricks, or violations of company policy, is called “heading jumping,” in which an ad is either purposely or inadvertently placed in a heading that falls alphabetically before the heading in which it should really be placed.
Either way, it’s not supposed to happen, and the ads Bobby handled for Stephens appear to have violated that policy, according to several sources inside Dex. By falling under the heading of “Garage Builders & Kits,” Stephens had an advantage over garage door companies that were under the normal heading of “Garage Doors & Openers.” That’s because when customers are in need of an emergency service repair, many call the first “biggest and brightest” company they see in the Yellow Pages.
Your story talks about a May 2 Dex internal e-mail message that says “heading jumping” was a problem in the Garage Door section. Do you have a copy of that e-mail?
I obtained a copy of an e-mail message from a Dex manager in Phoenix who reminded sales employees to avoid making company violations. He specifically said that “heading jumping” had been a problem in the garage door section, which several Dex employees say happened in the last Phoenix directory when Bobby was handling Stephens’ accounts.
Your story indicates that many of Stephens’ phone numbers were disconnected after his Yellow Pages ads were published. As a result, Dex Media apparently granted Stephens thousands of dollars in billing adjustments. How does that work?
According to the account records I’ve reviewed, the dozens of phone numbers used in Stephens’ garage door accounts were routinely shown to be disconnected, giving him large billing adjustments while the accounts were being handled by Bobby.
In some cases, when certain numbers were disconnected, the billing was wiped out completely for three-page ads that were supposed to cost more than $13,000 a month. I was told by several Dex employees that those ads remained in the Yellow Pages collecting business because alternate phone numbers in the ads still worked.
Your story says that Pete Stephens is billed “a couple hundred thousand dollars a month” in Yellow Pages ad expenses. Does that include all of Stephens’ operations or just those in Arizona?
Bobby said Stephens had a couple hundred thousand dollars a month in Yellow Pages expenses for the ads he ran across the country. Bobby was handling a chunk of that and collecting commissions from those ads.
Did you try to reach Pete Stephens?
I called several of the phone numbers listed in corporation records and in his Yellow Pages ads. I continually got the same answer: “He’s not here.”
In your opinion, are Sutton’s ads deceiving?
It’s not my place to say whether any of the ads are deceptive, but the ones that have appeared in the Tucson and Phoenix directories seem to have all the same elements that resulted in a hefty consumer fraud fine levied against Stephens in the state of Georgia in 2004.