BPOs becoming breeding ground of fraudsters?

[OhioChick]

Ravi Kant, 11 May 2008, Sunday

MILLIONS OF jobs have been created through Business Process Outsourcing (BPO) in India. These BPOs have also emerged as good foreign exchange earners for the country. Besides, BPOs have also brought structural change in several organisations. Slowly all software related back-end operations of organisations are switching over to BPOs and companies are more interested to concentrate on the core operations activities.


So banks are more interested to bring deposits and grant advances to its customers and all processing activities related to this core banking activity like documentation, follow up etc are centralised at one place and many a time these are being handled by some out source agency BPOs. In this way businesses are making it specialised in its own area of operation. This has given rise to several ancillary activities and in case of service industry these ancillary industries are BPOs.


Increasing importance of service industry in India has given rise to mushrooming growth of BPOs, which can be found now on almost at each nook and corner of our cities. The good English speaking ability is proving cutting edge for the Indians over their counterparts in countries like China and India is able to churn out major overseas BPOs businesses. All this is good till the time it is benefiting to the country within legal framework of the country.


Of late complaints of mischief by Indian BPOs’ employees to its overseas clients have emerged, which has caused the disbelief in the overseas clients about Indian BPOs. Seeing the risk of loss of business, Indian BPOs that are serving its overseas clients have taken steps to restore belief in Indian BPOs.


A huge number of BPOs in countries are taking jobs of domestic companies in areas related to credit cards, loan processing etc. Lax supervision in these BPOs is giving room to its some of miscreants employees to emancipate fraud without being caught. Recently a big chain of fraud has been unearthed in such a BPO located in suburb of Mumbai. This fraud in BPO has brought several loopholes in the operations of domestic BPOs in India.

http://business.merinews.com/catFull.jsp?articleID=133848

[antigop]

1. I have suspected that for some time -- other DU'ers have as well.

Thanks for posting.

[OhioChick]

2. The UK has been on to this for some time, now

Outsourcing exposes firms to fraud

Thursday, 16 June, 2005


The arrest last week of a man in western India in an alleged call-centre fraud case went unreported. This was despite the high-profile reporting on the case in April when 16 others were arrested.

This suited India's business process outsourcing (BPO) companies, especially Mphasis, whose four employees have been implicated in the case. They are yet to recover from the shock of the alleged fraud of nearly $400,000.

Amid calls for tightening BPO regulations and more effective cyber laws the country's call centres are busy taking adequate security measures. Another one or two such cases and the industry is doomed, they admit.

Police, who are still investigating the case, believe it was well thought through and very organised.

Investigating officer Sanjay Yadav says the latest arrest just highlights how well-planned and widespread the fraud was.

Backlash fears

Police say some of the 17 people currently languishing in jail opened fake accounts, and allegedly transferred large sums from the bank accounts of four American customers of Citibank whose back office work was being done by Mphasis in Pune near Mumbai.

Mr Yadav says they went on a luxurious holiday to Bangkok and kept transferring more money into their fake accounts from the Thai capital.

The industry, fearing a backlash from clients in the West, has started to get its act together.

One of the security steps the BPO centres are taking is the stringent background screening of new employees.

Yogesh Bhura, whose company, Quest Research, undertakes this task, has more than 250 BPO customers.

He has clients all over Asia, but many of his new customers are Indian.

But Mr Bhura's main challenge remains "educating people of the need to make this critical activity an integral part of their recruitment policy."

He reveals that 10-25% of applicants to call centres provide false and incorrect information.

"Fake degrees and documents are a major concern of our clients," he says.

More: http://news.bbc.co.uk/2/hi/business/4094894.stm