Risks associated with outsourcing financial services have been highlighted by the spectacular profits warning from travel promotions company Landround, which is responsible for handling points-for-travel claims from customers of a new credit card from Morgan Stanley.
Alternative Investment Market-listed Landround dropped the ball by underestimating the response to a promotion it was handling for another client. The mis-management left the company’s staff unable to process claims without incurring additional costs, which ultimately forced the company to publish an exceptional charge of £454,000 in interim results last week Landround shareholders had to deal with a 35% fall in the value of their holdings on the day and an interim dividend slashed to 2.5p from 3.5p this time last year. However, managers at Morgan Stanley and their customers are m...
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