"Dai Davis, a partner at commercial solicitors Brooke North, agreed that many firms routinely breach principles established by the law when they outsource data processing to India."
Working for a major company, I can say this is true. The people responsible for the offshoring are so tied up with the promises they make to senior management and care far to much about the Bonuses they will get for achieving so called cost savings, that they ignore all regulations including DPA.
We have several offshore organisations where coders, testers, support staff etc have access to the entire customer database including financial info.
The offshorers know it's wrong aswell but they won't rock the boat because all they care about is the almighty dollar.