From: FinTech Global
Lanistar has been accused of failing to pay its workers on time, suffering from low staff morale, postponing launches, mishandling influencer contracts and of making many employees redundant.
In a new article, Sifted reports that several employees within the FinTech startup are growing disgruntled with the leadership as the launch of the business has been delayed amidst a growing number of setbacks.
The spending card venture originally said it would launch in January, but has since pushed back the launch to April.
The delays have prompted Lanistar to reduce its customer support workforce in its Macedonia office. At least 40 staff members have been made redundant in the past two months, Sifted learned.
Having spoken with workers at the firm, Sifted revealed that remaining members of the Macedonia team had to wait for two weeks for their December salaries, which were originally scheduled for December 15.
In messages shared with Sifted, the Lanistar leadership has apologised for the delays.
“I sincerely apologise once again. And will adhere to this never happening again,” CEO Gurhan Kiziloz said in a message.
Some employees have since begun to receive their wages, Sifted reported.
“As with many businesses, the surge in the global coronavirus pandemic has forced us to push back our launch plans by a few months, thus keeping our team safe and adhering to government lockdown restrictions,” a Lanistar spokesperson told Sifted.
“In some cases, this has led to a temporary reduction in headcount in our customer services team, but we are confident all staff have been remunerated correctly as we have moved to a new HR platform.”
The delayed launch has also caused some customer confusion, according to employees speaking with Sifted.
For instance, customers have reportedly grown concerned about why they haven’t received an access code even though they have provided private information about themselves.
Employees said that management has told them to tell customers that the codes and the cards will be supplied either at the beginning or by mid-March.
Team members also alleged that they had been handling complaints from influencers who had helped drum up a buzz around Lanistar and who now claimed that the FinTech had mishandled their contract.
Moreover, Sifted has also taken part of complaints to HR about unprofessional managers. Lanistar did not respond to Sifted’s questions regarding the validity of these complaints.
This is not the first time that Lanistar has faced setbacks. In November the Financial Conduct Authority (FCA) warned that Lanistar was not allowed to operate in the UK.
“This firm is not authorised by us and is targeting people in the UK,” the City watchdog said in a statement. “Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.”
At the time Lanistar responded, “Legal and regulatory compliance are central to Lanistar’s business and we confirm that we are not providing financial services or products without the FCA’s authorisation.
“We will be partnering with firms that are authorised by the FCA to provide financial services or products. We are in the process of contacting the FCA to clarify the position and will be requesting that the notice is removed.”
The FCA did remove the warning a few days later after Lanistar agreed to add an appropriate disclaimer to its marketing materials updating its regulatory status to confirm that it is not conducting regulated activities. The firm was also going to amend certain aspects of its website.
“On that basis we have removed the consumer warning,” the FCA said in a statement.
The kerfuffle caused a backlash from API provider Modulr, which issued a statement saying that Lanistar had “not completed our due diligence process, so it does not have any right to refer to Modulr or suggest that it has the right to provide regulatory services on behalf of Modulr.”
It went on to say, as detailed by AltFi, that Lanistar had published communications without its consent and that it was not allowed to “use, or claim to use, Modulr services nor reference Modulr as a partner” until it had become an official partner.
Moreover, the regulatory warning has added to the discontent among the employees, according to the Sifted report.
Lanistar stated to the publication that it is looking forward to its “official launch in spring this year” and that is working on following “all the necessary regulatory guidelines”.
The news article did illicit several reactions on Twitter. For instance, a Twitter account said to be owned by Michael Sim, principal at FinTech venture capital firm Fidelity International Strategic Ventures, commented, “A Lanistar doesn’t always pay its debts.”
Other accounts made similar references to the Game of Thrones TV series.
Daniel Lowther, head of FinTech at B2B tech marketing firm CCgroup, tweeted, “Will be surprised if it ever launches. Almost like Lanistar is ticking off some secret checklist of all the things you need to do to undermine confidence in the firm ahead of its debut.”
Copyright © 2018 RegTech Analyst
