The Call Center Outsourcing Problem

American companies that have pocketed millions in taxpayer dollars to establish local call centers, are now outsourcing these jobs; devastating communities with job losses and exposing consumers to fraud and identity theft.

Call centers are a major economic force in the U.S., representing about three percent of our workforce. Yet, the number of customer service/ contact center jobs has declined in the last four years by 500,000 -- largely due to outsourcing and layoffs. In addition, the offshoring of call center jobs has led to a range of negative effects for consumers. Personal information, like Social Security numbers, is at increased risk to security breaches and sale on the black market. Fraud and identity theft are more prevalent.

Damage to Communities

Separate from concerns about customer data security, the call center outsourcing trend also has exacted a toll at home. Desperate to make up for lost manufacturing jobs, many local governments committed millions in taxpayer dollars to fund incentives for companies to locate call centers in their communities in the past decade.

Yet, numerous companies have taken these taxpayer handouts and, only to outsource the call centers jobs just a few years later, leaving local taxpayers to pay the bill and damaging local economies.

Of course, as with all types of job loss, there are personal and heartbreaking stories of workers who lost their jobs to call center off-shoring. In some of the most appalling examples, American call center workers were actually tasked with training their soon-to-be foreign replacements.

Damage to Consumers

CWA has documented dozens of specific instances of fraud directly related to employees at overseas call centers, the lack of legal safeguards to protect customers’ personal information in these countries, the loss of Constitutional protection for consumers’ personal data once it leaves U.S. shores, and the recent trend of “suboutsourcing” former Indian-based call center work to even cheaper foreign labor markets, including places like Saudi Arabia, Egypt, and the Philippines.

And some of the problems identified don’t seem to be getting better. For example, while India passed new data privacy laws this year, the Indian government specifically exempted outsourcing companies from having to comply with these regulations. Even worse, in the Philippines, which overtook India as the leader in off-shoring call center activity this year, there are virtually no data protection laws or notification laws when your information is compromised.

Learn More

Download the report: Why Shipping Call Centers Overseas Hurts Us Back Home