We all worry about using our credit card online, and we all worry about giving our credit card number to someone over the phone. But, what about giving our credit card to a complete stranger in a far away country? But, there are other types of fraud out there. Call centers with bad reputations can lure you into long contracts. Most of these companies are reputable, but some could be fraudulent. Its never wise to trust an unknown company with a large contract. Even if they are reputable, you don't know what type of fit they will be for your company and your needs.

How do you background check companies?
There are forums out there where you can check up on companies. outsourcing.org has a forum that will expose fraudulent companies. There was some huge scam of a company that did xml and image conversions and other services. Vital data was stolen, and one of the staff members ended up in Judicial custody in Bangalore.

What are the worries?
Confidential data could be sold by employees of BPO's. Credit card information could be sold too. One of the issues is that the BPO industry is growing so exponentially in India at this time, that companies are desperate to hire new employees. Companies often do not do as careful a job as they should at background checking their newer employees. Sure, crime exists at outsourcing companies, but is the rate of fraud higher in BPO companies than it is with companies back home? Plenty of fraud goes on every day all over the world. No country is immune from fraud, as fraud derives its roots in greed which is universal.

Inflated earnings.
Another company in India inflated its financial statements and balance sheets to include more assets than really existed. This is a quick way to fool investors and clients. Companies around the world twist financial data in order to enhance their stock value, but claiming that you have assets that dont' exist is crossing the line.

Do people get caught?
The legal system varies from place to place over time. Fraud exists everywhere and people do get caught and go to jail in all countries. Is there more fraud in American companies or Indian companies? I don't have the data to discuss that issue. But, it behooves the Indian government to do something fast. The outsourcing industry is reponsible for a sizeable porportion of India's GNP growth, and any issue that tarnishes its reputation is fatal to its economic jewels. India's government needs to implement some definitive standards for hiring and background checking standards to make sure that companies don't hire individuals who will compromise the trust they have built with other companies in any way. There needs to be more checking for fraud, and stiff penalties as India's future depends on outsourcing.

Should you worry?
Fraud exists everywhere. People get cheated in America daily. The main point is that its not so critical where the companies are that you use for services. What is critical is that you get to know them and background check them. Additionally, it is not wise to sign long term or high dollar amount contracts with those who you don't know well enough to make them worthy of such contracts.