Oops - That's Offshoring!

The New York Times quotes Sanjay Jadhav, a local assistant commissioner of police, who confirmed that the men, three from Indian outsourcing company Mphasis BPO in Pune and their 'associates', have been arrested and charged. Jadhav said that 'by talking pleasantly to the customers, these men obtained the personal identification number of the customers and used the international wire transfer system to move the funds'.

Now clearly, dodgy staff in call centers anywhere might engage in fraudualent activity. But, the point is, that the fraud is much less likely to be detected quickly in some lower cost locations, as the warning systems are just not that good. Pavan Duggal, an advocate in India's Supreme Court, said last week that 'this crime is a wake-up call. There is an urgent need for far more due diligence in Indian outsourcing companies than is being currently done'.

John McCarthy, vice president at Forrester Research Asia Pacific, is quoted in the media, saying that the Citibank customer thefts could result in a 30% reduction in the amount of call center work Western companies offshore to firms in India.