A background check
is the process of looking up and compiling
criminal records, commercial records and financial records (in
certain instances such as employment screening) of an
Background checks are often requested by employers on job
candidates, especially on candidates seeking a position that
requires high security or a position
, such as in a school, hospital, financial institution,
airport, and government. These checks are traditionally
administered by a government agency for a nominal fee, but can also
be administered by private companies. Results of a background check
typically include past employment verification, credit score, and
These checks are often used by employers as a means of objectively
evaluating a job candidate's qualifications, character
, fitness, and to identify
potential hiring risks. However, these checks may sometimes be used
for illegal purposes, such as unlawful discrimination
(or employment discrimination
, and violation of privacy
Pre-employment screening refers to the process of investigating the
backgrounds of potential employees and is commonly used to verify
the accuracy of an applicant's claims as well as to discover any
possible criminal history
, workers compensation claims
Screening applications in the UK
A number of annual reports, including BDO Stoy Hayward
's Fraudtrack 4 and CIFAS's
(the UK's fraud prevention service) 'The Enemy Within' have showed
a rising level of major discrepancies and embellishments on CVs
over previous years. Such business fraud cost United Kingdom
businesses $1.4 billion in 2005..
Almost half (48%) of organizations with fewer than 100 staff
experienced problems with vetted employees.
Thirty-nine percent of UK organizations have experienced a
situation where their vetting procedures have allowed an employee
to be hired who was later found to have lied or misrepresented
themselves in their application.
Since the onset of the Financial crisis of
, the level of fraud has almost doubled and some
experts have predicted that it will escalate further. Annual
research by Powerchex
has also shown that
the number of applicants lying on their applications has been
increasing steadily since the summer of 2007 when the financial crisis of
began. As of August 2009, nearly one in 5 applicants
have major lie or discrepancy on their application.
Larger companies are more likely to outsource than their smaller
counterparts – the average staff size of the companies who
outsource is 3,313 compared to 2,162 for those who carry out
Financial services firms had the highest proportion of respondents
who outsource the service, with over a quarter (26%) doing so,
compared to an overall average of 16% who outsource vetting to a
third party provider.
The construction and property industry showed the lowest level of
outsourcing, with 89% of such firms in the sample carrying out
checks in-house, making the overall average 16%. This can increase
over the years.
Types of checks
- Employment References
- Education Verification - School grades, degree and any
professional qualifications obtained
- Character Reference Check
- Gaps in employment history
- Identity and Address Verification - whether the applicant is
who he or she claims to be. Generally includes verification of the
candidate’s present and previous addresses. Can include a money
laundering, identity and terrorist check and one to verify the
validity of passports.
- Whether an applicant holds a directorship
- Credit History - bankruptcies
- Criminal History Report
The Financial Services Authority states in their Training &
Competence guidance that regulated firms should have:
- Adequacy of procedures for taking into account knowledge and
skills of potential recruits for the role
- Adequacy of procedures for obtaining sufficient information
about previous activities and training
- Adequacy of procedures for ensuring that individuals have
passed appropriate exams or have appropriate exemptions
- Adequacy of procedures for assessing competence of individuals
for sales roles
The Financial Services Authority’s statutory objectives:
- Protecting consumers
- Maintaining market confidence
- Promoting public awareness
- Reducing financial crime
The FCRA (Fair Credit Reporting Act) is the most important
regulation governing background screening. You can view this at the
www.expertbackgrounds.com home page by clicking on the link for the
white paper that says "State FCRA rulings."
Pre-employment screening in the U.S.
Due to the sensitivity of the information contained in consumer
reports and certain records, there are a variety of important laws
regulating the dissemination and legal use of this information.
Most notably, the Fair Credit
(FCRA) regulates the use of consumer reports
(which it defines as information collected and reported by third
party agencies) as it pertains to adverse decisions, notification
to the consumer or applicant, and destruction and safekeeping of
If a consumer report is used as a factor in an adverse hiring
decision, the consumer must be presented with a “pre-adverse action
disclosure,” a copy of the FCRA summary of rights, and a
“notification of adverse action letter.” Consumers are entitled to
know the source of any information used against them including a
credit reporting company
Consumers must also consent in order for the employer to obtain a
Types of checks
There are a variety of types of investigative searches that can be
used by potential employers. Many commercial sites will offer
specific searches to employers for a fee. Services like these will
actually perform the checks, supply the company with adverse action
letters, and ensure compliance throughout the process. It is
important to be selective about which pre-employment screening
agency you use. A legitimate company will be happy to explain the
process to you.
Many employers choose to search the most common records such as
criminal records, driving records, and education verification.
Other searches such as sex
, credential verification, skills assessment,
reference checks, credit reports and Patriot
searches are becoming increasingly common since the
September 11, 2001
. Employers should consider the position in
question when determining which types of searches to include, and
should always use the same searches for every applicant being
considered for one position.
They are frequently conducted to confirm information found on an
. One study showed that
half of all reference checks done on prospective employees differed
between what the job applicant provided and what the source
reported. They may also be conducted as a way to further
differentiate potential employees and pick the one the employer
feels is best suited for the position. As workplace violence
becomes more of an issue, employers are becoming more concerned
about the people they hire. Employers have an obligation to make
sure their work environment is safe for all employees.
States, the Brady Bill requires
criminal checks for those wishing to purchase handguns from licensed firearms dealers.
(like machine guns
or large quantities of
, and concealed weapons permits
Checks are also required for those working in positions with
special security concerns, such as trucking, ports of entry
, and airline transportation.
Other laws exist to prevent those who do not pass a criminal check
from working in careers involving the elderly, disabled, or
Possible information included
of information included on a background check depends to a large
degree on the sensitivity of the reason for which it is
conducted—e.g., somebody seeking employment at a minimum wage job would be subject to far fewer
requirements than somebody applying to work for the FBI.
- Criminal and incarceration records:There are several types of
criminal record searches available to employers, some more accurate
and up to date than others. Many websites offer the "instant"
background check, which will search a compilation of databases
containing public information for a fee. There are also other
database-type criminal searches, such as statewide repositories and
the national crime file. A commonly used criminal search by
employers who outsource is the county criminal search.
- Citizenship, immigration, or legal working status: The hiring
of illegal workers has become an issue for American businesses
since the forming of the Department of Homeland Security and its
Immigrations and Customs Enforcement(ICE) division. Many history
making immigration raids over the past two years have
forced employers to consider including legal working status as part
of their background screening process. All employers are required
to keep government Form
I-9 documents on all employees and some states mandate the use
of the federal E-verify program to research the working status
of Social Security numbers.
With increased concern for right-to-work issues, many outsourcing
companies are sprouting in the marketplace to help automate and
store Form I-9 documentation. Some jobs are only available to
citizens who are residents of that country due to security
- Litigation records: Employers may want to identify potential
employees who routinely file discrimination lawsuits. It has also
been alleged that in the U.S., employers that do work for the
government do not like to hire whistleblowers who have a history of
filing qui tam suits.
- Driving and vehicle records: Employers that routinely hire
drivers or are in the transportation sector seek drivers with clean
driving records—i.e., those without a history of accidents or traffic tickets. Department of Motor
Vehicles and Department of Transportation records are searched to
determine a qualified driver.
- Drug tests: Drug tests are used for a
variety of reasons—corporate ethics, measuring potential employee
performance, and keeping workers'
compensation premiums down.
- Education records: These are used primarily to see if the
potential employee had graduated from high school (or a GED) or received an college
degree, graduate degree, or some other accredited university
degree. There are reports of SAT scores being
requested by employers as well.
- Employment records: These usually range from simple verbal
confirmations of past employment and timeframe to deeper, such as
discussions about performance, activities and accomplishments, and
relations with others.
- Financial information: Credit
scores, liens, civil judgment, or bankruptcy may be included in the report.
- Licensing records: A government authority that has some
oversight over professional conduct of its licensees will also
maintain records regarding the licensee, such as personal
information, education, complaints, investigations, and
- Medical, Mental, and Physiological evaluation and records:
These records are generally not available to consumer reporting
agencies, background screening firms, or any other investigators
without documented, written consent of the applicant, consumer or
- Military records: Although not as common today as it was in the
past fifty years, employers frequently requested the specifics of
one's military discharge.
- Social Security Number: (or equivalent outside the US). A
fraudulent SSN may be indicative of identity theft, insufficient citizenship, or concealment of a "past life".
Background screening firms usually perform a Social Security trace
to determine where the applicant or employee has lived.
- Travel records: Jobs that require a security clearance may require the
applicant to disclose their past and future international travel
- Other interpersonal interviews: Employers may investigate past
employment to verify position and salary information. More
intensive checks can involve interviews with anybody that knew or
previously knew the applicant—such as teachers, friends, coworkers,
neighbors, and family members; however, extensive hearsay
investigations in background checks can expose companies to
lawsuits. Past employment and personal reference verifications are
moving toward standardization with most companies in order to avoid
and credit checks
for employment are highly
controversial practices. According to the Privacy Rights
, a project of the Utility Consumers' Action Network (UCAN)
"While some people are not concerned about background
investigations, others are uncomfortable with the idea of
investigators poking around in their personal histories. In-depth
checks could unearth information that is irrelevant, taken out of
context, or just plain wrong. A further concern is that the report
might include information that is illegal to use for hiring
purposes or which comes from questionable sources."
In May 2002
, allegedly improper post-hire
checks conducted by Northwest
were the subject of a civil
between Northwest and 10,000 of their mechanics.
In the case of an arrest that did not lead to a conviction,
employment checks can continue including the arrest record for up
to seven years, per § 605 of the Fair Credit Reporting Act
- Except as authorized under subsection (b) of this section,
no consumer reporting agency may make any consumer report
containing . . . Civil suits, civil
judgments, and records of arrest that from date of entry, antedate
the report by more than seven years or until the governing statute
of limitations has expired, whichever is the longer
Subsection (b) provides for an exception if the report is in
connection with "the employment of any individual at an annual
salary which equals, or which may reasonably be expected to equal
$75,000, or more"
Some proposals for decreasing potential harm to innocent applicants
Zealand, criminal checks have been affected by the Clean
Slate Act 2004, which allows individuals to legally conceal "less
serious" convictions from their records provided they had been
conviction-free for at least seven years.
Michigan, the system
of criminal checks has been criticized in a recent case where a
shooting suspect was able to pass an FBI check to purchase a
shotgun although he had failed the check for a state handgun
- Furnishing the applicant with a copy of the report before it is
given to the employer, so that any inaccuracies can be addressed
- Allowing only conviction (not arrest) records to be
According to the spokesman of the local police
- ... you could have a clear criminal history but still have
contacts with law enforcement that would not rise to the level of
an arrest or conviction [that can be used] to deny a permit whether
or not those involved arrests that might show up on a criminal
The Brady Campaign to Prevent Gun Violence has criticized the
federal policy, which denies constitutional rights based on a
criminal check only if the subject has been accused of a
Public records pay sites
Taking advantage of public records
availability in the United States, a number of Web based companies
began purchasing U.S. public records data and selling it online,
primarily to assist the general public in locating people. Many of
these sites advertise background research and provide employers
and/or landlords with fee-based checks.
There has been a growing movement on the web to use
advertising-based models to subsidize these checks. These companies
display targeted ads next to the reports delivered to landlords or
employers. Some of the reports provided by these pay sites are only
expanded versions of a basic people search providing a 20 year
history of addresses, phone numbers, marriages and divorces,
businesses owned and property ownership. Usually, these sites will
also provide a nationwide criminal report for an added
Fraudtrack 4 Report
- CIFAS - The Enemy Within
Track 4 Report
- Fraud doubles yet expert says the worst is still to
Under-21s told 29% more lies on job applications this year than
- Annual pre-employment Screening Survey
- Kathy Barks Hoffman, Associated Press, 10:33 am EDT Apr 13,
"Mich. shooting suspect was denied permit"