JP Morgan outsources Food Stamp customer service to India
2/9/11, "Food Stamps: JPMorgan & Banking Industry Profit From Misery," nextnewdeal.net, Covert
4/29/2009, "Food Stamps Create Jobs… in India," ABC News
"While the government outsourced its card creation needs to JPMorgan, the bank in turn outsourced the customer service end to India. So if you're a food stamp user who has a problem or a question, don't expect to actually get someone in your own country to help you out. They can't be bothered to actually deal with the people they're giving such a necessary service to....
States save by outsourcing
States found it cheaper to outsource these services. By switching to debit cards for food stamps and other benefits, states save millions of dollars in processing and administrative fees.
Companies, including JP Morgan, filled the niche. For a fee, the bank will provide debit cards to benefit recipients. Each month, they will load money onto the cards and on a daily basis process transactions at stores.
For unemployment insurance, the providers also process ATM cash withdrawals.
For instance, in Michigan, JP Morgan allows unemployment recipients two free withdrawals from its network of ATMs. For each addition withdrawal, the bank takes a $1.50 fee. If somebody loses their card, the first replacement is free. The second costs $7.50.
The banks also get a fee for each case they handle.
Take Indiana. JP Morgan gets 62 to 64 cents for each food stamp case handled monthly there. With 296,245 cases right now, that means the state is paying JP Morgan $183,672 a month on top of any other fees it collects.
Indiana eliminated 100 full-time employees when it hired JP Morgan to make the program cost-neutral, according to Marcus Barlow, spokesman for the state's Family and Social Services Administration.
But unlike Florida, Tennessee or West Virginia, Indiana keeps all its calls domestically. In fact, all of its calls go to a call center in Maryville, Ind., Barlow said, because the state required an in-state call center when soliciting bids.
Other states have rebelled against sending jobs overseas.
South Carolina used to have its calls go to a JP Morgan call center in India. But in its latest contract, signed a year and a half ago,
- it stipulated that the calls stay domestically."...