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Offshoring American Call Centers: The Threat to Consumers, Communities and National Security

Offshoring American Call Centers: The Threat to Consumers, Communities and National Security

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Published by cwaunion
In recent years, U.S. companies exported more than
500,000 call center jobs to India, the Philippines, Egypt, Mexico, Honduras, and other developing nations.

Call centers are a valuable source of jobs in the United States, employing as many as five million Americans--nearly four percent of the U.S. workforce.

Recent technological advances have made it easier to transfer these jobs overseas to lower-paid, less regulated workers, a trend that increases risks for consumers and devastates communities nationwide.
In recent years, U.S. companies exported more than
500,000 call center jobs to India, the Philippines, Egypt, Mexico, Honduras, and other developing nations.

Call centers are a valuable source of jobs in the United States, employing as many as five million Americans--nearly four percent of the U.S. workforce.

Recent technological advances have made it easier to transfer these jobs overseas to lower-paid, less regulated workers, a trend that increases risks for consumers and devastates communities nationwide.

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Published by: cwaunion on Oct 13, 2012
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Communications Workers of America
October 2012
OFFSHORING AMERICANCALL CENTERS:The Threat to Consumers,Communities, andNational Security 
 
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EXECUTIVE SUMMARY 
When companies send call center jobs overseas, theydon’t just frustrate consumers—they hurt oureconomy as well.—Ohio Senator Sherrod Brown
I
n recent years, U.S. companies exported more than500,000 call center jobs to India, the Philippines,Egypt, Mexico, Honduras, and other developing na-tions.
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Call centers are a valuable source of jobs in theUnited States, employing as many as five million Amer-icans—nearly four percent of the U.S. workforce.
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Re-cent technological advances have made it easier totransfer these jobs overseas to lower-paid, less regulated workers, a trend that increases risks for consumers anddevastates communities nationwide.The offshoring trend has evolved into a crisis for con-sumers, with fraud and identity theft becoming a multi-million-dollar business. For example, in one widely reported scam, criminals used foreign call center workersto make 2.7 million calls and collect some $5.2 millionthrough threats and intimidation, alleging that innocentconsumers owed money for past loans.
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In the current economic landscape, with millions un-employed and the recovery shaky, U.S. workers and thecommunities in which they live need these call center jobs. In response, the U.S. Congress is taking action.Both the House of Representatives and the Senate arereviewing bills to keep call centers in the United Statesand to end federal rewards and incentives for offshoring. At least seven state legislatures are moving forward onsimilar legislation.
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The Consequences of Offshoring 
Federal action is essential because the consequences of offshoring are destructive on many levels, devastating individuals, communities and the nation.Consumers’ financial and medical data become vul-nerable to theft and misuse by poorly regulated con-tractors overseas.Communities that subsidized call center expansiona few years ago are devastated by the sudden loss of  jobs and revenue.Laid-off workers and their families join the rolls of the unemployed and often lose their sense of inde-pendence along with their paychecks.National security may be threatened as more finan-cial, medical, and personal data about American cor-porations and citizens falls into the hands of contractors in less stable nations.Despite such clear vulnerability to fraud, four largebanks — Bank of America, J.P. Morgan Chase, WellsFargo, and Citigroup — have recently moved call centeroperations to the Philippines, a country that lacks eventhe most basic safeguards for security, privacy, and legalaccountability.
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In addition to the threat to consumers’ wallets, off-shoring presents a threat to civil liberties. Once data ismoved overseas, Fourth Amendment protections from warrantless searches disappear.Finally, given the instability of some new offshoring sites,data security must be given even more serious scrutiny.Egypt, which recently experienced an unexpected polit-ical upheaval during the “Arab Spring,” is rapidly be-coming one of the most popular locations for new callcenters.
Bi-partisan Support from Congress andthe Public
Legislation now pending in both the House and Senateaddresses the multiple threats posed by increased off-shoring of call centers. Both the House bill (H.R. 3596)and the Senate bill (S.3402) are designed to keep jobsin the United States and improve protections and servicefor consumers.
 
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U.S. CALL CENTER WORKER AND CONSUMERPROTECTION ACT — H.R. 3596 AND S. 3402
This bi-partisan legislation would:• Require call center agents to reveal their locationsto U.S. consumers and transfer customers to U.S. callcenters upon request.• Prohibit companies that move call center jobsoverseas from receiving federal grants and loans.• Give preference on government contracts tocompanies that keep call center jobs at home.
Voters across the political spectrum support legislationto keep call centers at home. An August 2012 survey of likely voters nationwide found that the vast majority strongly support proposals to limit the offshoring of callcenter jobs. According to the survey, 90 percent supportproposals that would give customers’ the right to requesttransfer to a U.S.-based customer service agent. An over- whelming number of respondents support prohibitionsagainst giving federal loans (81 percent) and grants (75percent) to companies that send call center jobs overseas.Three-quarters (78 percent) rated overseas call centersnegatively, including 79 percent of Democrats, 75 per-cent of Republicans, and 78 percent of Independents.
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BREAKING DOWN THECALL CENTER THREAT
If you think about the scenario, you have the lowest-paid contractors furthest away from the main office,all with access to sensitive data. It’s an incrediblyrisky proposition.—Paul Bilden, Covelight Internet security company
M
any U.S. companies are taking advantage of cheaper labor costs by relocating facilities tothe developing world. India is the most well-known magnet for call centers, but last year the Philip-pines surpassed India with some 400,000 workersdevoted to answering Americans’ calls.
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Companies alsoare moving quickly into China, Saudi Arabia, Egypt,Mexico, and the Czech Republic, among other sites. Theresult for consumers:Lack of security for private records—including fi-nancial and medical records.Loss of millions of dollars to fraud.Violation of Fourth Amendment protections against warrantless search and seizure.
Hundreds of Thousands of Security Breaches
Threats to consumers’ private data are not new. For atleast a decade, security breaches in overseas call centershave been reported in the U.S. and European press. For-eign call center workers have peddled customers’ finan-cial and health information to criminals, defraudedconsumers of millions of dollars by posing as debt col-lectors, and stolen hundreds of thousands of dollars frombank customers.The U.S. Federal Trade Commission has been investi-gating scams defrauding Americans. For example,Citibank customers in the United States lost more than$400,000 to Indian call center scams.
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British bank cus-tomers have also lost hundreds of thousands of pounds,and journalists have gained access to private bank ac-count records.
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In 2012 a call center ring based in India scammed con-sumers by impersonating workers from Microsoft and Apple, gaining access to personal information by offer-ing to do security checks.
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In the Philippines and India,call center employees have been arrested for a variety of schemes to steal consumer financial data and make off  with thousands of dollars from American Citibank andHSBC.
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