Insecurities over Indian outsourcing

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current Mphasis call center worker, said Mphasis Vice Chairman Jeroen Tas. He said the perpetrators may have persuaded bank customers to disclose their account passwords.

A Times of India story cited unnamed sources in pegging Citibank as the bank in question. Citibank did not return a call requesting comment. Mphasis declined to comment on the identity of the bank. Mphasis, which has operations in India, China and Mexico, is led by former Citibank executives.

"What you did in Bangalore might not as easily follow you to Mumbai."

--Vail Dutto
Chief executive, InTelegy

The Indian arrests come during a period of heightened anxiety about data security and identity theft.

In one of the latest examples, LexisNexis revealed that an intrusion into its Seisint databases may have compromised personal information on about 310,000 Americans, a tenfold increase on a previous estimate.

In 2003, the San Francisco Chronicle reported allegations that a woman in Pakistan doing clerical work for the University of California at San Francisco Medical Center had threatened to post patients' confidential files online unless she was paid more money.

But most of the criticism of so-called offshoring has focused on other matters, such as service quality and communication problems.

Data security at companies providing call center services offshore is indeed an issue, however, according to industry observers. Checking into the credit and criminal backgrounds of employees is not as reliable in India as it is in the United States, said Vail Dutto, chief executive of InTelegy, a California-based consulting firm. Among other services, InTelegy helps clients choose call center outsourcers in India. Dutto said Indian methods for tracking a person's past are not as mature as those in the United States, where an individual's misdeeds in one state are likely to turn up when the person applies for a job in another.

"What you did in Bangalore might not as easily follow you to Mumbai," Dutto said.

Mphasis' Tas agreed that checking the backgrounds of employees in India is more difficult than in the United States. "It is harder to track that," he said. But the background-checking process for call center employees and other BPO workers in India could improve, Tas said, thanks to plans by the country's National Association of Software and Service Companies, or Nasscom, to set up a national registry of BPO workers.

Another concern is employee attrition. Thanks partly to the perception that BPO work amounts to a dead-end job, attrition rates have been increasing in India. Higher turnover works against efforts by call center companies to run a tight ship, argues Forrester Research analyst McCarthy.

"Forrester expects that the rising attrition rates in the call center space--50 percent to 100 percent--undermine suppliers' ability to adhere to processes and sufficiently check backgrounds," McCarthy wrote in his report earlier this month.

McCarthy also suggested the Mphasis breach will seriously hurt the offshore BPO business. "Call center BPO growth could drop by as much as 30 percent," he wrote.

Tas called the Forrester report "sensational." He said Mphasis' annual turnover among BPO employees was in the range of 30 percent to 40 percent, and he said that level is not unusual for call centers worldwide.

In a statement made on April 13, Mphasis said it "highly values data protection and data security of its clients. It has proactively instituted

[sanenazok]

It's happened here in the US

Within the last two months the Chicago Sun Times reported that DMV employees stole confidential information and used it to create new credit cards. This type of theft will happen anywhere proprietary information is found, just because that's where it's accessible. Afterall one robs the bank as that's where the money is.

[bobeld]

Outsourcing

Identity theft is a worldwide problem. Most employees of companies, outsourced or domestic, are honest but there are always a few who will abuse their position for personal gain.
My concern regarding outsourced identity theft would be in the legal remedies available to correct a problem outside of the U.S. Would the government of (place your favorite outsource nation here) have the resources (or the resolve)to follow through on thefts occuring to outsiders (i.e. U.S. citizens)?

[b2bhandshake]

One swallow doesn't make a summer

The expression that comes to mind reading this and other mentions of the incident in the press is ...One swallow doesn't make a summer... And to add to this the issue here is about Credit Card Fraud and not about BPO or Offshoring, though the fact that it happened in an offshored BPO context cannot be ignored?
- Mohan B, Author
http://www.offshoringmanagement.com

[Que.Ball]

Outsourcing to US is dangerous too.

It is interesting to note that the Canadian government is
currently concerned with outsourcing of government services
especially healthcare data to US based business. The reason is
that under the USA patriot act the USA government could
secretly request this data and there is nothing to prevent abuse.

See link for example:
http://www.nationalreviewofmedicine.com/issue/2004_04_22/
goverment_medicine01_08.htm

A very similar argument.

[vijaymaurya]

Insecurities arising over self diffidence

The US is paranoid over losing jobs due to their inadequecies. An easy option is to blame the Indian Outsourcing Firms - as if credit card and bank frauds are nonexistent in the US. I feel a more mature method has to evolve out of this exercise and further strenghten the system rather than dig holes.

[doctorsoos]

get real

US paranoid about losing jobs due to inadequecies. Get off your crack pipe pal. It is due to greedy corporations not our skills. You have no idea what you are talking about whatsoever. And you are insulting to those of us in the workforce in the US. Go to india and see if you can get a job (if you are not indian of course). You won't, they don't hire foreigners.

Unbelievable...that's all I can say about your comment. Certainly has no merit whatsoever.

India - the 51st state ?

The basic problem is that right now, other countries, where offshored jobs now reside are NOT accountable, in the same way, workers are in the US - they don't haveUS laws & regulations.

If India, Singapore, China, et al. want to continue to do these jobs, let them be subject to US laws & penalties. Make India the 51st state. Want to bet that, if workers (and companies) in other countries were subject to the same laws, regulations & penalties, the profit margin would start to shrink?

Clearly, there is a saving, hiring people with a lower cost of living, on lower wages. But accountability costs too.

India is digging it's own grave

The negligence from the part of Government of India (GOI) to make laws to guarantee the security of the data?s off shored are encouraging data theft by the BPO employees. The latest data theft is reported from Gurgaon , literally sitting under the nose of India's governing machinery. While similar laws (cyber law) have been implemented to prevent child porn being circulated and selling of unauthorized personal details, GOI is still lagging behind many developed countries to adopt a data protection standard. While ranked 7th in the internet penetration list, India still has no unified laws to regulate the Misuse of internet and related technologies