The security of offshore outsourcing is now in question as employees of an Indian outsourcing provider were arrested for stealing money from customers.

Three former MphasiS employees were arrested in Pune, India. They allegedly siphoned $300,000 from Citibank customers by getting account details while working at the bank's offshore call center.

They obtained customers' usernames and passwords, and used these to transfer funds into new accounts under false names and e-mail accounts. Victims of the theft alerted the bank soon as they noticed that there were missing funds in their accounts.

According to analyst firm, Forrester Research Asia Pacific, these thefts could lead to a 30% reduction in the amount of call center work that Western companies offshore to India.