Concerns raised over online gasoline seller MyGallons.com

With gasoline prices at nosebleed levels, MyGallons.com sounds like a great deal: Save money by pre-purchasing gasoline through the website and reap cash as the price climbs.

But pumpers should beware.

The Better Business Bureau gave Miami-based MyGallons.com an “F” rating today, citing what it called “a material omission of fact” in the publicity material distributed as part of the service’s June 30 launch.

“It’s just like in school, so ‘F’ is obviously bad,” said Alison Preszler, a spokeswoman for the bureau. “We’re not calling this a scam… . We just have serious concerns.”

On Monday, the company said its gas-redemption program used the Voyager fleet network, a bank card processing service owned by U.S. Bank. But it has become clear that MyGallons.com didn’t have a deal with the bank, Preszler said.

“This is obviously a huge red flag for the Better Business Bureau, because they don’t have the most basic system up,” she said. The report was posted by the Better Business Bureau of Southeast Florida and the Caribbean.

MyGallons.com founder Steven Verona said it had an agreement to use the Voyager network through a regional reseller, and had processed its card transaction through that system during a three-month trial that recently ended. Verona said he believed his contract was still good when he issued the news release about the program’s launch.

“We had an agreement with them. We’ve agreed to go our separate ways, and we are replacing them with another vendor,” Verona said.

Minneapolis-based U.S. Bancorp issued a statement saying: “Neither U.S. Bank National Association ND, nor Voyager Fleet Systems Inc. have a contract to do business with MyGallons.com LLC, and there are no ongoing negotiations to enter into any agreement with MyGallons.”

U.S. Bank didn’t say whether it once had a contract with MyGallons.com, either through the bank or through a regional reseller.

Verona was surprised to hear that his company had been given an “F” grade. “I’m looking forward to straightening this out with the Better Business Bureau,” he said.

The bureau made no assessment of the company’s business model, which allows member consumers to buy gasoline at current prices and store the credit on a debit-like card. The gallons stored on the pre-paid gas card can be redeemed at a long list of filling stations, including major brands such as Shell and Chevron.

Annual memberships cost $29.95 or $39.95 and there is a fee each time customers refill their cards. MyGallons.com said it used the consumer money to buy gasoline through hedge funds.

The company’s launch Monday got widespread publicity. Verona said it has signed up 6,000 members. They will be sent cards once the company finalizes a deal with a replacement processing firm, he said.

“Things are going great,” he said in an interview. “We’ve gotten a tremendous response from the public, and we’re very excited.”

elizabeth.douglass@

latimes.com