Tuesday, July 11, 2006

Ramasastry on outsourcing, identity theft and fraud

I have linked before to Anita Ramasastry's columns on FindLaw, which are always interesting. But if you have any involvement in advising companies about outsourcing, this one is a very interesting read.

FindLaw's Writ - Ramasastry: Risky Business? How Multinationals' Outsourcing Involving Customer Data Can Lead to Identity Theft and Other Fraud

As I have detailed in several columns for this site, many security breaches and data thefts have recently occurred at companies and government agencies within the United States. In this column, I'll turn to another related, and also worrisome data security problem: Thefts of personal data that occur overseas or "offshore," as major American corporations outsource their data processing and customer service operations to other countries to cut costs.

I'll inquire whether U.S. customers have any legal recourse if they are victims of identity theft resulting from these security breaches. In addition, I'll argue that Congress should take a hard look at this problem - but I'll also suggest that, in the end, self-regulation by the multinationals that are outsourcing the data may be the best solution.

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