'Telefraud' from overseas call centers targets American consumers, union says

U.S. Senator Bob Casey, D-Pa., proposed legislation to protect U.S. call-center jobs. He speaks here during a Hillary Clinton campaign in November 2016 in Philadelphia.

Phone scams costing American consumers hundreds of millions of dollars have boomed as companies outsourced customer-service call-center operations, the communications workers union said in a report seeking job protections for call-center workers.

The Communications Workers of America says the outsourcing of customer-service call centers to India, the Philippines, Mexico, Costa Rica, and other low-wage countries exposes Americans to fraud and costs U.S. jobs. Last October, a federal investigation into an overseas phone scam resulted in criminal charges against dozens of individuals, many of them in India.

Six Democratic senators, mostly from the Midwest, have sent President Trump a letter seeking an executive order on call centers, and Sen. Bob Casey (D., Pa.) reintroduced legislation last week that would force companies to disclose publicly when they outsource U.S. call-center jobs. 

"This is an issue where I would hope the Trump administration would support us," Casey said in a phone interview. "We have to make it difficult to send these jobs overseas." Call-center job losses "rival some of the manufacturing job losses," he added. 

Trump has said he would protect U.S. manufacturing jobs by renegotiating trade deals and other government action.

Casey said he was still seeking a Republican cosponsor of the legislation. Legislation also has been reintroduced to the House of Representatives.

The United States Call Center Worker and Consumer Protection Act of 2017 would force overseas call-center representatives to tell American consumer callers where they are calling from and give them the option of transferring to a U.S.-based agent. Companies could be fined for not disclosing the information, according to the proposed legislation. Casey previously introduced the legislation in 2013.

Telecom and cable companies, banks, credit-card companies, airlines, and retailers have outsourced cell-center jobs overseas. The CWA report estimates that the United States has lost 200,000 jobs over the last decade, based on U.S. Bureau of Labor Statistics  data.

Consumers gripe about being routed to call centers overseas with employees who don't speak English well enough or don't understand their problems.

Paul Stockford, research director at the nonprofit National Association of Call Centers, said that companies have been independently bringing call-center jobs back to the United States as they seek to improve their customer service.

Stockford said that companies that sell premium-priced items or big-ticket items, such as airline tickets, seem to be bringing customer-service jobs back to the United States.

"There are a lot of second thoughts about sending jobs offshore," Stockford said. "When you call Nordstrom, you don't want to talk with someone in India."

But Stockford said that "if you are in a business with thin margins and high churn," such as wireless phone companies, "you may want to roll the dice" with outsourcing call-center operations.

Though the CWA says there have been significant job losses in U.S. call-center jobs, Stockford's group's private research shows "steady growth" in call-center agents in the United States, with an estimated 71,000 call centers and about 2.3 million jobs.

Stockford says it is difficult to use the government's data on call-center employment because of the way the Bureau of Labor Statistics classifies jobs. For example, employees at a Verizon Communications Inc. call center could be classified as telecommunications workers, he said. The Communications Workers of America represents Verizon call-center employees, including those in Philadelphia.

One growth driver for customer-service representatives has been new digital platforms such as social media, Stockford said. "Millennials don't want to talk on the phone, but baby boomers do."

Stockford said he had not tracked information on fraud-related overseas call centers.

The CWA report cites news reports that Indian officials have opened specialized police stations for phone and online fraud in the state of Uttar Pradesh in northern India.

In October, federal prosecutors brought charges against about 60 people, accusing them of participating in a crime ring that bilked more than 15,000 Americans out of $300 million.

The callers, originating from five call centers in India, posed as IRS or immigration agents, grant makers, or bank officials to threaten and swindle victims out of money. In a highly complex scheme, "runners" in the United States laundered the money using prepaid debit cards, Western Union transfers, and informal money exchanges to funnel money back to India.