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Data Protection Challenge Against Offshoring
[01 Jul 2004]
LTU’s solicitors are supporting a Lloyds TSB customer in a challenge against the transfer of work abroad, on the grounds that doing so does not meet the stringent data protection requirements operating across the European Community.
The customer has accounts with a bank branch, Scottish Widows and Cheltenham & Gloucester, and objects to data being accessible in India where the same standards of data protection are not available. The customer has demanded that no sensitive personal data - as defined by the Data Protection Act 1998 - should be transferred outside the European Economic Area.
Of all the work being offshored by UK companies, the data held by financial services companies is certainly amongst the most sensitive that is being transferred abroad. This is because records of standing orders payments and credit and debit card transactions all provide a considerable insight into the personal lives of customers. Furthermore, customers taking out pensions with Scottish Widows have to provide personal medical details on themselves.
The Bank appears to be arguing that though data on customers can be viewed in India, it has not technically been transferred abroad but is held in the UK, therefore satisfying the requirements of data protection legislation.
The case is being referred to the government appointed Information Commissioner to establish whether Lloyds TSB is meeting its statutory Data Protection obligations.
If successful, this case could force Lloyds TSB to obtain the written consent of customers before transferring their sensitive personal information abroad. Since there is a considerable body of research indicating just how unpopular offshoring is amongst customers, this could force Lloyds TSB into rethinking its whole ‘Jobs to India’ strategy.
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