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Outsourcing Data and Privacy

A growing data privacy issue is the outsourcing of personal data. Increasingly, US companies are outsourcing data processing to other countries. Although the United States lags much of the world in data protection, our personal information is being sent overseas to many countries that lack the same level of privacy protections as the United States. This can create risks that the data can be misused for identity theft or for fake identification. It could also create national security concerns.

There’s a big outsourcing controversy brewing in Florida, where Governor Jeb Bush made a multimillion dollar deal with a company called Convergys to process personal data, including Social Security Numbers and financial information. Convergys then contracted with another company that then outsourced to India. According to the Tallahassee Democrat:

The Tallahassee Democrat reported Dec. 25 that two former employees of GDXdata Inc. had secretly sued their ex-employer, saying the company improperly sent Florida employee records to companies in India, Barbados and possibly China for some processing steps involving the People First system. People First is Gov. Jeb Bush’s biggest “outsourcing” project – a nine-year, $350 million deal with Convergys – and all employee records are supposed to stay within the country.

Democratic legislators and U.S. Rep. Jim Davis of Tampa, a candidate for governor, called for an investigation of possible identity theft. Unions representing state employees urged DMS to make Convergys buy insurance to protect emloyees against fraudulent use of their personnel information.

Argenziano had scheduled a presentation by DMS Secretary Tom Lewis for her Senate Governmental Oversight and Productivity Committee meeting. But she said Lewis is meeting with top Convergys officials this week and “is not happy about some of the things he’s finding.”

The suit was filed under seal in Leon County Circuit Court, seeking to collect damages on behalf of the state for alleged irregularities in People First records processing. It did not accuse Convergys of any wrongdoing and the employee-services giant said at the time it had dropped GDXdata as a subcontractor for unexplained failure to do work as provided by its contract.

GDXdata said it would vigorously defend the suit. The plaintiffs said the company sought to cut processing costs from 6 cents to a penny per page by sending work overseas.

Originally Posted at Concurring Opinions

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This post was authored by Professor Daniel J. Solove, who through TeachPrivacy develops computer-based privacy training, data security training, HIPAA training, and many other forms of awareness training on privacy and security topics. Professor Solove also posts at his blog at LinkedIn. His blog has more than 1 million followers.

Professor Solove is the organizer, along with Paul Schwartz, of the Privacy + Security Forum and International Privacy + Security Forum, annual events designed for seasoned professionals.

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