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27 April 2005 at 11:09:16 PM
We've had a number of instances recently in which hackers or thieves stole customer information from banks and credit agencies, including social security numbers and other personal information. That's in the United States. What happens when data is no longer directly under the control of the United States, but accessible by workers in other countries, as happens with outsourcing?
In India, police arrested former call center workers of a company that handled customer accounts, for stealing customer funds.
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.
This raises questions about the security of US citizen data when handled by overseas companies.
In the wake of the theft, some observers have voiced concerns about the security of data being handled by outsourcers in India, including worries about weak procedures for checking employee backgrounds. According to this school of thought, the Mphasis breach could dramatically dent the amount of call center work shipped to outsourcers operating offshore.
"This was not a lapse of judgment or an issue of poor customer service: The incident was an organized and systematic plot to steal customers' money," an analyst with Forrester Research wrote recently. "Forrester believes that this breach, coupled with recent onshore disclosures of sensitive customer data, will have far-reaching negative connotations for the offshore BPO (business process outsourcing) space." ....
But losing control of sensitive data abroad is particularly worrisome, argues Peter Gregory, chief security strategist at consulting firm VantagePoint Security.
"Outsourcing America's corporate business processes to overseas countries not only makes accountability difficult to enforce, but it puts our national sovereignty at risk," Gregory said in a statement. "In this, the Information Age, a country like India could disconnect itself from the Internet and hold America hostage--a provocative action that would be tantamount to an act of war."
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