ICYMI: Investigations Show Link Between Foreign Call Centers & Range of Fraudulent Activity

WASHINGTON, DC – A major investigative journalism piece from The Sunday Times (UK) provides unsettling details about how individuals’ financial data are illegally culled from call centers in India and peddled on a thriving black market. 

On the heels of an investigation by the U.S. Federal Trade Commission (FTC) that uncovered a fraudulent debt collection ring operating out of an Indian call center, these developments call into question the safety and security of our continued off-shoring trend – no matter the way foreign authorities and off-shoring companies try to downplay the risk.  Last December, the Communications Workers of America (CWA) released a report demonstrating the significant security problems ushered in by the trend of off-shoring call center jobs.

According to CWA Communications Director Candice Johnson, “Remind me the benefits of off-shoring call center jobs again?  We have destroyed hundreds of thousands of U.S. jobs in order to place consumers’ data at unprecedented risk?  It’s past time for foreign beneficiaries of the off-shoring trend to come clean about these problems and for the corporate actors responsible for this trend to side with the American people.”  

Among the disturbing revelations unearthed by the U.K. investigation:

• Disturbing Details of Call Center-Related Data Black Market Uncovered By Undercover Journalists: Two Sunday Times undercover reporters described their interaction with one man working in the black market of data: “Clicking on the keyboard, a spreadsheet entitled “UK bank card data” appeared containing the personal details of hundreds of British customers who hold accounts with leading high street banks…Scrolling down the screen, Singh added: “These [pieces of data] are ones that have been sold to somebody already. This is Barclays, this is Halifax, this is Lloyds TSB.  We’ve been dealing so long we can tell the bank by just the card number.”

• Are Foreign Countries and Affected Corporations Playing Down the Risk?  According to the Sunday Times investigation, “The Indian authorities and British firms who take advantage of the low wages paid to call centre staff have sought to play down the threat of security breaches. When details of 1,000 British customers were sold to a newspaper by an IT worker last year, 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.””  A police source told The Sunday Times that “British companies are reluctant to report such breaches for fear of the potential adverse publicity.”  

• Law Enforcement and Security Analysts Disagree with Downplayed Risk Assessment:  Raghu Raman, a security adviser quoted in the Sunday Times piece warned, “Foreign clients need to understand that when they outsource to India to get cost benefits continuously, costs are being cut somewhere and many a time it is security…Frankly, information security in India is not in a good shape.” Similarly, a police source quoted in the investigative piece noted that, “Unofficially, however, we know this business is out of control. The simple fact is the banks are worried that their customers will get scared and swap banks if they learn how easily and cheaply their confidential details are sold.”

• Poll Confirms Public Ahead of Policymakers Regarding Threats – 83% Do Not Trust Foreign Call Centers to Keep Data Safe:  Given the range of security threats unearthed, perhaps it is no surprise that the public feels wary about the off-shoring trend.  A YouGov poll of U.K. residents accompanying the investigative piece in the Sunday Times found that a whopping 83% of respondents “do not trust call centres based overseas to keep your personal data safe.”  And rightfully so.

• Problem Not Limited to the U.K. – U.S. FTC Raises Alarm About Debt Collection Scam Operating Out of Indian Call Center:  In late February, as Huffington Post reported, the Federal Trade Commission (FTC) announced it had shut down a fraudulent telemarketing ring in which an Indian call center, in conjunction with two California-based companies, defrauded Americans out of more than $5 million.  As the article explains, “workers in India made threatening calls to Americans getting them to pay money on debts that they didn’t owe…according to the FTC, more than 8 million calls were made since 2010 and at least 17,000 transactions processed across the United States related to the global scam.” According to C Steven Baker, director of the Federal Trade Commission's Midwest Region, "We think we have a really serious problem…As economies have globalised, so has fraud."

Earlier this week, CWA hosted a press call to discuss the momentum behind a potential remedy to many of the problems unearthed by the recent investigations.  Federal legislation introduced by Rep. Tim Bishop (D-NY) and Rep. Dave McKinley (R-WV) and featuring nearly 100 co-sponsors would bring some call center jobs back home and provide U.S. consumers with more rights and accountability – including being told the location of the call center to which they are speaking.  Additionally, the legislation would ensure that companies contributing to the off-shoring of call center jobs from the U.S. would be ineligible for certain federal grants.  The call also featured representatives from multiple states which have introduced state call center bills.  Currently, five state legislatures are considering, or have considered, their own call center worker and consumer protection legislation.

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