UK bank Lloyds TSB has been threatened with legal action by its staff union over the transfer of call centre jobs to outsourced processing centres in India on grounds that the move breaches the Data Protection Act.
An unnamed customer is mounting the legal challenge, backed by The Lloyds TSB Union (LTU).
The union claims the bank is breaching the Data Protection Act by transferring customer financial data to overseas centres without their consent. LTU says according to European law, personal data can only be transferred outside the European Economic Area with the written consent of customers.
The government-appointed Information Commissioner is expected to decide on the union's case in the next few weeks.
Lloyds TSB announced in October last year that it was closing its customer contact centre in Newcastle, leading to the loss of 986 UK jobs, and would transfer the work to its operations in India. Additionally, in April this year, the bank's Scottish Widows division opened a new office in Bangalore India to pilot the offshoring of back office functions.
The union has been actively campaigning against the offshoring of jobs and says if the challenge is successful, it would have wider implications for the whole of the financial services industry.
Earlier this year British members of the European Parliament called for new data protection laws to prevent unauthorised access to customer data by offshore workers. The MEPs, backed by British trade union Amicus tabled plans for European regulations to prevent unauthorised access of personal details being processed abroad.