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April 8, 2005 9:58 AM PDT

Backlash from report of Indian outsourcing theft?

Posted by Ed Frauenheim
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A report that former call center employees in India allegedly stole $350,000 from consumer accounts could prove to be a serious setback to the offshore outsourcing industry.

Suspected gang members arrested by police in Pune included three ex-workers of Mphasis BPO. BPO refers to business process outsourcing. Police said the workers allegedly stole customers' personal account information and transferred around $350,000 to fake accounts in Pune.

A Times of India story on Wednesday cited unnamed sources in naming Citibank as the bank in question.

Citibank did not immediately return a call requesting comment.

Forrester Research on Friday put out an alert about the effect of the affair on the offshore BPO sector.

"Forrester believes that unlike past negative BPO headlines, 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," the research firm said in an email Friday. "This breach, coupled with recent onshore disclosures of sensitive customer data, will have far-reaching negative connotations for the offshore BPO space??Call center BPO growth could drop by as much as 30 percent."

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