Serious Consumer Data Risks Highlighted in CWA Report

Washington, D.C. –  Citing a growing number of security questions surrounding overseas call centers, the Communications Workers of America (CWA) today released an updated version of a  sobering December 2011 report detailing the linkage between the off-shoring of call center jobs and a range of serious negative effects on U.S. consumers and job seekers, including placing consumers’ personal information at risk.

Several major investigations have unearthed fraudulent and criminal activity emanating from overseas call centers- Including stories in the Sunday Times and Australian TV Newsmagazine Today Tonight.  Despite serious security concerns, Wells Fargo and T-Mobile have announced that they will close numerous U.S. call centers and instead expand their commitments to call centers in India and the Philippines.

As security concerns rise, so does the momentum behind the bi-partisan “US Call Center Worker and Consumer Protection Act”. Representative Tim Bishop (NY-1) today announced that the number of co-sponsors has risen to over 100 . The recent reports of data breaches and security lapses at overseas call centers underscore the importance of the bi-partisan legislation that would ban taxpayer dollars in the form of federal grants or guaranteed loans to American companies that move call center jobs overseas.

The legislation would also require call center employees to disclose their location to U.S. consumers and transfer that call to a U.S.-based center if requested by the consumer, as well as require that a list of companies that off-shore their call center work be made available to the public.

Key Updates to the Report Include:

• Information from an alarming investigation by The Sunday Times: The investigation details the existing black market for consumer data in India, and shows how easily undercover reporters were able to access and purchase valuable consumer data.

• The U. S. Federal Trade Commission (FTC) uncovered a telemarketing scam operating out of an Indian call center:  Employees pretended to be from a debt collection agency and defrauded Americans out of over $5 million.

• Foreign entities and affected corporations are downplaying the incidence and risk of consumer data fraud: According to the recent Sunday Times investigation, “the Indian government — anxious to preserve the reputation of an industry worth an estimated £3.7 billion a year — described it as a “freak incident.”  Additionally, a police source told The Sunday Times that “British companies are reluctant to report such breaches for fear of the potential adverse publicity.” 

• Despite concerns, further plans to offshore call center jobs continue: T-Mobile is closing seven U.S. call centers, a development that will mean approximately 2,000 Americans will be out of work.  T-Mobile USA took over $61 million in state and local recruitment subsidies to originally locate these call center jobs in the U.S.  Similarly, Wells Fargo recently announced plans to expand its call center operation in the Philippines – after earlier laying off hundreds of American workers by shuttering call centers in such locations as California, Florida, and Pennsylvania.   Meanwhile, Wells Fargo received a $25 billion lifeline from the government via TARP.  

Link to full report:

http://files.cwa-union.org/national/News/Misc/20111215-offshore-callcenter.pdf

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Contact: Candice Johnson or Elizabeth Schilling, CWA Communications, 202-434-1168, cjohnson@cwa-union.org or eschilling@cwa-union.org