CWA Report: Outsourced call centers pose serious security threat

Outsourced call centers pose a serious security threat, according to a new report issued late last week from the Communications Workers of America.

The report, titled “Why Shipping Call Center Jobs Overseas Hurts Us Back Home,” cites several examples of security breaches involving outsourced call centers, which were reported by various U.S. and international media. Here are a few examples cited in the report:

-- Call center employees in India were caught after stealing $426,000 from American Citibank customers by coaxing them into revealing their passwords
-- A Bangalore, India-based call center employee was arrested after stealing $420,000 from customer accounts at HSBC
-- An undercover journalist reported that he bought personal details, including passwords, of 1,000 British Bank customers from a Delhi IT worker
-- A Pakistani woman threatened to post patient records on the Internet unless she got a raise

CWA: Protections are lacking
The CWA report argues that there are insufficient protections in place to deter this type of fraud. For example, the report notes that many foreign nations do not maintain central criminal databases and do not have standard identifiers such as the U.S. Social Security number. As a result, background checks can cost up to $1.000 per employee and if conducted, may be done so in an undocumented manner.

A Pricewaterhouse Cooper executive told U.S. Banker that “Sometimes they’ll just ride around the [potential employee’s] neighborhood and talk to the constable.”

When data is sent overseas, it also loses some protections that it would have in the U.S., including Fourth Amendment protections, the CWA notes. “This means that as long as an individual’s data isn’t specifically ‘targeted,’ the data can be collected and analyzed by U.S. federal agencies without a warrant,” the report states.

The report also argues that nations to which call centers are outsourced often lack sufficient notification laws regarding data breaches.

Proposed legislation
The CWA represents 150,000 call center workers. The union’s release of the outsourcing report appears to be timed to coincide with the recent introduction in the House of Representatives of the U.S. Call Center Worker and Consumer Protection Act. The proposed legislation aims to:
-- Make companies that move call centers overseas ineligible for federal grants or loans
-- Require the Secretary of Labor to maintain a list of employers that locate call centers overseas
-- Require companies to provide 120-day advance notification before moving a call center overseas
-- Require call center agents to reveal their location if asked to do so by the caller
-- Require overseas call center agents to transfer a caller to a U.S. agent if the caller requests such a transfer

“Outsourcing is one of the scourges of our economy and why we are struggling so to knock down the unemployment rate,” said U.S. Representative Tim Bishop (D-N.Y.), co-sponsor of the proposed legislation, on a recent conference call with reporters to discuss the legislation. Also sponsoring the bill is U.S. Representative Dave McKinley, a Republican from West Virginia.

Some call center operators, particularly those in rural areas, are trying hard to compete with overseas call centers--and some rural call center operators say they are seeing a trend toward companies moving call centers back to the U.S. (CP: Call center business still a viable one for rural America). The ability of home-based workers to use a broadband connection to conduct call center duties has helped fuel that trend (CP: 'Reverse' call center outsourcing -- driven by broadband -- could create 100,000 U.S. jobs (CP: 'Reverse' call center outsourcing -- driven by broadband -- could create 100,000 U.S. jobs).

If passed, the proposed call center legislation would likely further fuel a move of call center jobs back to the U.S. But the likelihood of any legislation passing—even with bi-partisan support--is a big “if” these days.