23 February 2004

Outsourcing: Danger to Privacy

OSAC - Outsourcing: Danger to Privacy :

from Wired News
Article ID: D140322

Democratic Sen. Dianne Feinstein warned the chief executives of banks and credit companies this week that she would crack down on them if they didn't take steps to protect their customers' private data, such as medical and financial information, which is increasingly being handled by clerks working abroad.

In a letter to the CEOs of Citigroup, Bank of America, Equifax and TransUnion, Feinstein (D-California) said she might introduce federal legislation to protect the personal data of Americans if the companies don't establish safeguards.

'In my view, American companies which are outsourcing consumer data to foreign countries must assume responsibility for the data,' Feinstein wrote.

All of the recipients of Feinstein's letter already have outsourced clerical services, or have stated their intent to do so.

Companies increasingly are outsourcing more than just programming jobs to places like India. They are using foreign accountants to prepare U.S. tax returns, foreign radiologists to examine X-rays and even foreign clerks to transcribe dictation of sensitive medical data from American doctors. In these cases, most Americans have no idea that someone outside the United States handled private information about them. More worrisome, Americans might not be able to sue or collect damages from foreigners who misuse the information."

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