Striking a sharp blow against call centre fraud, the US Department of Justice has charged 61 individuals and entities, including 32 Indians in Ahmedabad, for cheating US citizens of millions of dollars by misusing their personal data for extortion. Posing as Internal Revenue Service officials, they coerced their victims, who included the elderly, into paying taxes that they did not owe, which they then diverted into plastic money. India has done well to collaborate in the probe which led to charges being filed, and extradition should follow. Call centre fraud endangers the outsourcing revolution which has brought prosperity to millions and accelerated upward mobility in the middle class. Data is the new gold, a new source of value, and we cannot allow its security to be compromised.
The consequences of data silos being breached have been anticipated from the very inception of the boom in offshoring back office operations. It was expected even in the lowest segment of outsourcing, which was also the first to scale up: Medical transcription. Patients with serious conditions would not want their prescription data to be made public, since it could have implications for insurance and employment prospects. The industry was more keenly aware about the problem than consumers at the time, but public sensitivities about data security and privacy have grown and now neglect resulting in breaches is not tolerated by the market. In this case, had the Indian authorities been listless in their response, they would have provided a credible argument for American entities to keep their data off Indian shores. Confining American jobs to America is an election issue this year, it may be recalled.
The call centre industry has responded to the need for data security with physical cutouts. Smartphones, pen drives and Bluetooth devices, which can be used to siphon off data, are usually banned from secure locations. But hardware tweaks have their limits. Finally, data is in the hands of humans, rather than systems. Some of those humans are fallible, and their hands are light-fingered. Only legal deterrence can ensure data security, and India has shown its commitment to containing the menace of online fraud by identifying citizens who had participated in a fraud overseas. Apart from the free movement of goods and services, capital and labour across borders, globalisation also depends on the free flow of data, without which global systems of banking and commerce would collapse. The importance of data mobility is so obvious that it is often overlooked. But if the networks of trust on which money travels across borders are compromised, the pain will be keenly felt.