Does the Use of Foreign Call Centers Violate Privacy and Consumer Protection Laws?

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Many companies rely on foreign call centers to help with customer service or other business needs. Now, Plaintiffs in a federal lawsuit allege that the use of such centers violates customers’ privacy and puts personal and financial information at risk. On August 3, 2011, three residents of Washington D.C. sued Bank of America (“BoA”) over the alleged confidentiality and privacy risks caused by the transfer of their data to foreign call centers. On behalf of the class, the three plaintiffs allege that their financial data receives greater protection inside the United States than outside it.

This case against BoA should be closely watched by all companies with foreign call centers, especially in those jurisdictions that have protections similar to the D.C. Consumer Protection Act. Ohio’s Consumer Sales Practices Act (“CSPA”), for instance, contains language similar to the language from the D.C. Consumer Protection Act on which the BoA Plaintiffs rely. Although the CSPA does not generally apply to certain financial institutions, the breadth of its coverage, combined with the BoA Plaintiffs’ legal theory, could reach many businesses which use foreign call centers (for example, collection agencies and retail companies). The arguments and defenses raised, the court’s rulings on those arguments, and the ultimate disposition by the Court of Appeals for the D.C. Circuit (if the case reaches that point) will form highly relevant precedent for all companies that rely on overseas call centers to service their U.S. customers.

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