The British banking industry was scrambling to restore consumer confidence and tighten security on Thursday, after a ring of Indian call center workers was exposed for selling private information from UK bank accounts.
The Sun newspaper reported that Kharan Bharee, described as a Delhi-based computer expert, was buying the PIN and credit card numbers, private addresses and passport details of UK account holders from call center employees, then selling them to would-be identity thieves.
The paper's undercover reporter claimed to have purchased confidential account details of 1,000 Britons for around ?3 (US$5.46) each.
In response, big British banks and building societies, including Lloyds TSB, HSBC and Barclays, were on Thursday working with City of London police to address apparent security breaches, while reassuring customers that the outsourcing of call centers to India was, by and large, a safe practice.
"We have strict procedures in those call centers whereby staff are required to put all belongings in a locker and can't take bags or mobile phones to work stations," a Lloyds TSB spokesperson said.
"They should not have access to information like passport details and bank passwords ... so we are investigating how this has happened. The first we heard about it was when we were contacted by City of London police. We are taking the allegations very seriously," the spokesperson said.
Lloyds TSB, like many other big banks, has sub-contracted its call center operations to India, where cheap labor and favorable tax laws save the company millions each year. And while some banking officials reaffirmed their faith in the practice on Thursday, City of London police warned that cases of identity theft from Indian call centers were not new phenomena.
Meanwhile, Kiran Karnik, chief of India's leading software corporation, the National Association of Software and Service Companies (NASSCOM), maintained India was a "trustworthy" destination for the outsourcing of call centers.
Karnik also told reporters that NASSCOM would help authorities in pursuing call center workers involved in illegal selling of customer information.
But despite those assurances, Steven Philippsohn, senior partner and head of fraud litigation at the London law firm Philippsohn Crawfords and Berwald, warned that companies risked exposing the confidential information by outsourcing call centers.
"The hazard with offshore operations is that data protection laws are often not in place and are difficult to enforce," Philippsohn said.
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