Study: Off-Shore Call Centers Put Americans at Higher Risk of Fraud

A sobering new report illustrates the risks consumers face when businesses off-shore call center jobs to countries that lack legal safeguards against identity theft and other fraud.

The report, produced by CWA researchers, documents specific instances of fraud, the failure of other governments to protect personal information, the loss of Constitutional protection for personal data once it leaves U.S. shores and the recent trend of "sub-outsourcing" former Indian-based call center work to even cheaper foreign labor markets.

"Huge corporations are pocketing U.S. taxpayer dollars, then taking call center jobs overseas, leaving it up to foreign laws and governments to police and catch criminals who want to steal from American consumers," CWA Chief of Staff Ron Collins said. "All the while, people may not even know their personal data is entrusted to someone on the other side of the ocean."

The report underscores the importance of the bi-partisan legislation introduced in Congress this month that would ban taxpayer dollars in the form of federal grants or guaranteed loans to American companies that move call center jobs overseas.

"If American companies insist on taking American jobs overseas, American taxpayers should not be subsidizing corporate greed," Collins said.

Collins noted that while India passed new data privacy laws this year, the Indian government specifically exempted outsourcing companies from having to comply. "Even worse, in the Philippines, where a significant amount of Indian work has been sub-outsourced, there are virtually no data protection laws, including data breach notification laws," he said.

The report finds that many foreign companies are unable or fail to do adequate background checks on employees. Many nations don't maintain central criminal databases and don't have standard identifiers such as the U.S. Social Security number. As a result, proper background checks are expensive, estimated at up to $1,000 per job candidate.

Collins said the pending legislation would greatly reduce the risks for American consumers. The "U.S. Call Center Worker and Consumer Protection Act," co-sponsored by Rep. Tim Bishop (D-N.Y.) and Rep. Dave McKinley (R-W.Va.), would require call center employees to disclose their location to U.S. consumers and transfer calls back to U.S-based call centers upon request. The bill would also require that a list of companies that off-shore call center work be made available to the public.

Read the full report here (PDF), or follow the links on CWA's website at www.cwa-union.org.