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Questions Raised about MyGallons.com

BBB gives prepaid gas-card venture an "F"

By Truman Lewis
ConsumerAffairs.com

July 7, 2008

• Why Are Oil Prices Falling? • Labor Day Gas Prices Up a Penny • Gas Prices Fall for 37 Days • Gas Prices Slide 8 Percent from Record • Gas Prices Creep Down • Oil Price Trend May Be Good News For Consumers • Gasoline Drops Below $3.90 a Gallon • Gas Prices Pull Back Slowly • Oil Prices Fall As Storm Misses Rigs • Latest Gas Price Round-Up • 'Run Your Car On Water' Scheme Could Leave Consumers All Wet • Unregulated Energy Trading Blamed for Much of Gas Price Gusher • Airlines Join Effort To Limit Oil Speculators • Questions Raised about MyGallons.com • 'Hypermiling' Is Dangerous, Says AAA • Struggling Drivers Blame Washington for High Gas Prices • What’s Really Fueling Those Sky-High Oil Prices • Credit Card Fees at the Pump are a 'Hidden Tax' on Consumers • Survey: 3 Out of 4 Angry About High Gas Prices • $2 A Gallon Gas Possible, Analysts Tell Congress • Speculators Buy More Oil Contracts Than Oil Companies • Saudis to Pump More Oil • Limiting Oil Speculators Gains Ground • Congress To Probe Oil Price Spike • Oil Market 'Saturated,' Iran Claims • Feds See No Relief from High Gas Prices • High Gas Prices Could Mean Lower Insurance Rates • High Gas Prices Good For Kia, Honda • Gas Prices Rip Past $4 and Keep Climbing • Administration, OPEC See Different Causes Of Oil Surge • Feds Probing Possible Oil Market Manipulation • Beware of Fuel Sippers Sipping High-Test • Retailers Respond to High Gas Prices with Discounts, Promotions • Rushing Into a Smaller Car Too Soon May Not Save Money • Hybrid Sales and Prices Climb in Lockstep with Gas Prices • Truckers Bemoan Burden of High Diesel Costs • Gas Prices Biting into Worker Productivity • Consumers Warned About Gas-Saving Schemes • Is Tony Soprano Controlling Gas Prices? • Oil & Gas: The New Bubble • Critics: New Federal Gas Mileage Standard Falls Short • Consumers Feeling Pain of Skyrocketing Gas Prices • New Gas Price Record Forecasts Expensive Summer Driving Season --- • More ...

By now, everyone knows that Southwest Airlines hedged its bets years ago by locking in jet fuel prices before they went into orbit. MyGallons.com is a service that claims to offer something similar to everyday motorists.

But, as always, it's buyer beware. The Los Angeles Times reports today that the Better Business Bureau is giving the Miami-based company an “F” rating, citing "a material omission of fact" in MyGallons.com's publicity material.

The company says it uses the Voyager Fleet network, a bank-card processing service owned by U.S. Bank. But it has become clear that MyGallons.com doesn't have a deal with the bank and currently doesn't have any other card processor in place, according to BBB spokeswoman Alison Preszler.

Preszler said the BBB has "serious concerns" about MyGallons.com.

MyGallons.com says it has a deal with a regional reseller that lets it use the Voyager network but U.S. Bancorp says that neither it nor Voyager Fleet Systems has a contract with MyGAllons.com And it adds there are no negotiations underway to establish such an agreement.

MyGallons.com founder Steven Verona says he is about to make a "big announcement" about replacing Voyager Fleet with one of its competitors.

Verona issued press releases last week touting his system, which says it lets consumers buy gas at current prices and store the credit on a prepaid debit card. Consumers can then use the card to gas up at any of the filling stations in a list Verona issued, he said.

Verona said the site signed up 6,000 members after last week's announcement. He said customers will be getting their prepaid cards as soon as the company finalizes its deal with a card processor.

There's an annual membership fee of $29.95 or $39.95, depending on the plan chosen, and a $1.95 fee each time motorists use the card.

MyGallons.com says it invests the prepaid funds in low-risk accounts, using some of it to buy fuel-price hedges.

The BBB said it wasn't making a judgment about the business model, just raising a red flag about the company's deal, or lack of one, with a credit-card processor.

The Times reported that Verona, 39, has started a series of small companies, including an online store called Pursue Peace Clothing. He filed for personal bankruptcy in 2001, the newspaper said.

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