BPO Boom, Trust Bust

Driven by several factors like a large English-speaking population, skilled workforce, cheap labour, etc., many foreign firms have invested in the business process outsourcing (BPO) sector in India over the past few decades, making it a major source of revenue and employment. According to Kotak Institutional Equities’ recent report, the Indian BPO sector saw a growth of 7.8% CAGR during FY2015–2025, with exports standing at USD 45 billion, accounting for 20 per cent of overall outsourced spends. It went on to state that the BPO export growth has outpaced that of information technology (IT) services and this momentum is expected to continue in the next financial year as well. This trend reflects its role as a major economic driver and source of employment besides strengthening the country’s position as a global leader in providing cost-effective IT-enabled services. In the meantime, defrauding activities too have dramatically increased, resulting in huge financial losses as well as causing severe psychological distress for victims. In August this year, the Directorate of Enforcement (ED) busted illegal call centres in Noida and Gurugram run by a group of scammers accused of cheating US citizens of approximately US$ 15 million (nearly INR 131 crore) in just 2–3 years. Of late, the law enforcement agencies have conducted such raids at various locations, including Bengaluru, leading to the arrest of 16 people last month, followed by the arrest of 117 individuals, including 25 from Nagaland, in connection with a fraudulent call centre in Maharashtra, and the busting of a similar scam operating in West Delhi last week. While these efforts are commendable, it is clear that this is just the tip of a vast network. Much work remains to be completed. The Indian police personnel must also address the accusations levelled against them regarding their alleged connection to these illegal operations — that they turn a blind eye to such activities.

These scam call centres, which target vulnerable populations like the elderly, particularly foreign nationals and increasingly Indian citizens, with deceptive tactics and impersonation to defraud their hard-earned money, have inflicted a severe blow to the country’s reputation as a top destination for legitimate BPO services. Today, many dub India as a hub of fraudulent activities. This has to be arrested with urgency to avoid further erosion of trust and growing international stigma against Indian call centres. India has several laws to combat financial fraud, including those involving fake call centres, and the law enforcement agencies conduct regular raids, but these measures alone are insufficient to tackle the menace that is widespread. Concerted and co-ordinated efforts from all fronts – international, central and state law enforcement bodies – are required to dismantle the issue, which is transnational in nature. Failing to stop these illegal operations could result in significant financial losses and may lead international firms to withdraw operations from the country. It is also essential to educate the public, especially vulnerable populations, about the common tactics used by scammers to protect them from fraud. Simple measures, such as not sharing sensitive information like banking details with unknown callers and reporting any suspicious calls to the relevant authorities, can go a long way in preventing scams.