Sunday, August 22, 2004

Article: Customer's data protection fears hinder Lloyds TSB's offshoring plans

It is not only in British Columbia where unions are using privacy legislation to prevent offshoring of data processing jobs:

Lloyds TSB in data protection battle over offshore outsourcing

18 August 2004 - UK bank Lloyds TSB has been threatened with legal action by its staff union over the transfer of call centre jobs to outsourced processing centres in India on grounds that the move breaches the Data Protection Act.

An unnamed customer is mounting the legal challenge, backed by The Lloyds TSB Union (LTU).

The union claims the bank is breaching the Data Protection Act by transferring customer financial data to overseas centres without their consent. LTU says according to European law, personal data can only be transferred outside the European Economic Area with the written consent of customers.

The government-appointed Information Commissioner is expected to decide on the union's case in the next few weeks.

Lloyds TSB announced in October last year that it was closing its customer contact centre in Newcastle, leading to the loss of 986 UK jobs, and would transfer the work to its operations in India. Additionally, in April this year, the bank's Scottish Widows division opened a new office in Bangalore India to pilot the offshoring of back office functions.

The union has been actively campaigning against the offshoring of jobs and says if the challenge is successful, it would have wider implications for the whole of the financial services industry.

Earlier this year British members of the European Parliament called for new data protection laws to prevent unauthorised access to customer data by offshore workers. The MEPs, backed by British trade union Amicus tabled plans for European regulations to prevent unauthorised access of personal details being processed abroad.

See also this article from

Customer's data protection fears hinder Lloyds TSB's offshoring plans

Lloyds TSB's plans to transfer work to India are being challenged by one of the bank's customers on the grounds that they infringe legal requirements concerning data protection.

The case against Lloyds TSB is that India does not have the same stringent standards of data protection that are legally required by the Data Protection Act 1998.

European legislation requires that sensitive personal data can only be transferred outside of the European Economic Area with the express consent of customers.

India is not included on the European Union's list of countries that offer adequate levels of protection for personal data.

The government-appointed Information Commissioner is being asked to rule on whether Lloyds TSB is acting legally when transferring sensitive personal data abroad.

Steve Tatlow, assistant general secretary at Lloyds TSB Group Union, said: "This is an important case. If successful, it could force Lloyds TSB to drop its offshoring policy for fear of losing many customers.

"Concerns over data protection are yet another reason why Lloyds TSB should now listen to its customers and commit itself to the UK."

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