MEPs warn of dangers of offshoring

A group of UK politicians has called on the European Commission to extend data protection laws to cover customer information...

A group of UK politicians has called on the European Commission to extend data protection laws to cover customer information handled overseas, warning that offshore outsourcing is "an accident waiting to happen".

Labour MEPs representing the Amicus trade union last week told the Employment and Social Affairs Committee that tighter regulation is required to address fears that security is more lax in offshore destinations.

The move comes after US credit card company Capital One pulled out of India after unauthorised credit levels were offered to customers by Indian call centre operators.

Insurance giant Axa has also relocated some Indian customer service jobs to its head office in Leicester, after problems with the processing of applications for small and medium-sized firms.

Amicus has predicted that 200,000 UK call centre and business services jobs will be exported from the UK by 2005, which will mean every banking and personal finance customer will be forced to allow their details out of the UK.

David Fleming, national secretary for finance at Amicus, said, "Offshoring is an accident waiting to happen. It is only a matter of time before a serious crime is committed which will ruin the reputation of the British financial services industry."

The Information Commissioner's Office, which enforces the Data Protection Act, said it had no concerns at this stage about offshore outsourcing. "We have never taken any action against firms that have broken the Data Protection Act by offshoring," said a spokeswoman. "One of the principals of the Act is that companies should not outsource to countries that are not in the EU unless strict contracts are in place, but we are talking about big firms that are aware of the issues."

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