Indian police make arrests in outsourcing fraud

NEW DELHI, India--Police have arrested former employees of an Indian call center that handles U.S. customer accounts for allegedly stealing consumers' funds.

The suspected gang members arrested by police in Pune included three ex-workers of Mphasis BPO.

Police said the employees allegedly stole customers' personal account information and transferred around $350,000 to fake accounts in Pune. Sanjay Jadhav, the assistant commissioner of police, said about $23,000 (1 million Indian rupees) of the fraud money has already been recovered. The call center workers left their jobs last December.

"The detection systems worked, and there was swift, coordinated information exchange between the affected parties," an Mphasis representative told CNET News.com from Mumbai. "We are in close contact with the police and are working with them in their efforts towards law enforcement."

Security issues have been a growing concern for companies that outsource work overseas. In particular, companies have become concerned about the leakage and misuse of consumers' personal financial information in offshore call centers. The National Association of Software and Service Companies, an Indian trade group, has set up an Indo-U.S. security forum to make its members aware of security and privacy issues when they handle sensitive information from foreign companies.

"India is fast becoming the outsourcing capital of the world, and this kind of incident, while unfortunate in itself, when successfully dealt with highlights and reaffirms the existence of an effective framework of laws and a commitment to enforcing them in India," Nasscom President Kiran Karnik said in a statement.

Nasscom recently launched a security initiative in Pune with local IT companies and police.

"Distressing as this incident has been, it is a sad but realistic fact that no system can be 100 percent foolproof. The deterrence of prompt action is, therefore, critical," Karnik noted. "In this context, the proactive efficiency and the prompt success of the police reinforces the reputation of India as a country with a strong legal and enforcement framework."

[jv]

Won't fix the problem

More sophisticated schemes will evade detection. Any intelligent attempt to leverage the incompatibility of the legal environment will succeed well enough and often enough to draw international criminal organizattiion into the system.

No US user information beyond a reference number should ever be allowed out of the US. Foreign workers should be double-blind as to the identity of the "customer". Tax forms done in India or other over-seas companies are at extreme risk of exploitation.

The US Congress MUST address the legal environment before it is too late.

Promises to India and Pakistan made to deter an impending war have further aggravated the situation.

Congress has shown that it can act quickly to protect one "soul" in Florida. Can they act quickly for the economic safety of all US citizens?

This is a War of Economies

Its a war of economies and the legalities that we need to talk about. Need to have second thoughts on who makes war between countries. If US want to act International Police - why do they sell arms to the same countries in first place. That can take the discussion to a whole new is it Profit? Dominance? A struggle for existence? ... :-P