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Schumer's Anti-off-shoring Call Center Bill could be too Expensive, Complex, to Administrate: Report

TMCnews Featured Article

June 07, 2010

Schumer's Anti-off-shoring Call Center Bill could be too Expensive, Complex, to Administrate: Report

By Patrick Barnard, Group Managing Editor, TMCnet

New York Senator Charles Schumer's proposed "anti-off-shoring bill," which would impose an excise tax on companies that transfer domestic customer service calls to foreign call centers, might be too complex and expensive for the federal government to administrate - even at the proposed rate of 25 cents per call transferred - an article on Network World (News - Alert) explains.

In addition to charging companies an additional fee for each call transferred to an off-shore call center, the bill, which is yet to be officially introduced, would also require corporations to disclose to customers that their call is being transferred off-shore and to which country. Schumer's plan would require companies to reveal in quarterly and annual reports how many customer service calls they receive and what percent are sent overseas. Companies would have to certify annually with the Federal Trade Commission that they are in compliance with the offshore call center rules, or be subject to civil penalties.
The goal of the bill is to stop if not reverse the off-shoring of US call center jobs to overseas locations. It is expected to pass due to the public outcry over the off-shoring of US jobs - an issue which has become even more politically-charged in recent years due to the recession.
However, actively policing offshore call center traffic could turn out to be a huge, resource-intensive job that will cost taxpayers a bundle each year, the Network World article points out.
'It would be huge,' Phil Fersht, founder of outsourcing analyst firm Horses for Sources, is quoted as saying in the report. He pointed out that there are more than 30 million businesses in the U.S. that would have to be regulated.
'The costs of setting this up and managing it would take a long, long time to recoup at 25 cents a call,' he said. 'It sounds like a huge waste of public money and resources. The government would be better off investing those funds in helping U.S. business set up onshore.'
Under the proposed bill, the fees collected would be also used to address the security issues involved in the use of offshore call centers, including access to personal information such as bank account numbers, credit information or medical histories - however it does not explain what technologies or methods might be used for securing the data.
There is also some doubt as to how effective the legislation will be. Although it might make some smaller companies think twice about setting up an overseas call center, larger companies which have already established their call center operations overseas would not be likely to bring them back to the US, due to the high level of investment they've made in those facilities. It's possible that those companies will simply pass that cost onto their customers - or they will hire even less expensive call center workers, resulting in poorer customer service.
Although it is expected to have support in Congress, the bill is controversial because it breaks from the more traditional approach of finding an 'incentive' for companies to keep the jobs here -- such as a tax break based on calls kept in the US -- as opposed to 'punishing' companies for outsourcing jobs by imposing additional fees.

Patrick Barnard is a senior Web editor for TMCnet, covering call and contact center technologies. He also compiles and regularly contributes to TMCnet e-Newsletters in the areas of robotics, IT, M2M, OCS and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.

Edited by Patrick Barnard

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