A customer of British bank, Lloyds TSB, is to legally challenge its plans to outsource work to India, claiming that personal data could be compromised in doing so.
The unamed customer is alleging that Lloyds TSB is flouting the UK’s Data Protection Act in sending their personal information outside of Europe without consent. Backed by Lloyds TSB Group Union (LTU), they are now seeking a ruling from the British Information Commissioner to assert whether Lloyds TSB is acting illegally in not getting written permission from its customers to send their personal details to India.
Lloyds TSB has faced potential industrial action from the LTU following its announcement last October to transfer 750 full-time jobs from Newcastle to India. The LTU has been campaigning to retain Lloyds TSB’s call center work in the UK, and commissioned a recent MORI poll that found 49% of its own customers would consider moving bank rather than have their accounts managed in India.
The bank planned to close its customer contact center in the North East as part of a strategy to move 1,500 jobs to India by the end of 2004. Lloyds TSB said a further 500 jobs will be transferred from its Cheltenham & Gloucester, Scottish Widows, general insurance and group operations, to make up the rest of the 1,500 jobs to be transferred.
The company has already transferred 250 jobs to its center in Bangalore. Staff there provide services including HR management of flexible benefits, credit card processing, personal lending platform, cash handling, cheque processing, life & pensions processing, securities processing, telecomms, desktop, payroll, abd support services.
The whole debacle is very embarrassing for Lloyds TSB, whose chairman Maarten van den Bergh is quoted as saying at the bank’s recent AGM: If we were to offshore and it were not to the satisfaction of our customers, we would have a problem.
The Information Commissioner is expected to announce its ruling in the next few weeks. If this were to prove in favor of the unamed customer, it could become a watershed in the UK industry, with far-reaching implications for Lloyds TSB, and other financial services companies such as HSBC, Barclays, and Norwich Union currently embarking on similar offshoring moves.