Background Checks

A word about background checks …

Different investigation and legal firms and professionals use various terms to describe the concept of “background checks:”

Screenings, backgrounders, background checks, background verifications, due diligence, and so on.

However, these concepts basically fall into three categories, NOT ONE of which is satisfied by the do-it-yourself Google or Bing “instant online background search.”  

The average consumer, no matter how much of a Google whiz he or she is, simply does not have access to the multiple, comprehensive, official government records sources and reporters that investigation professionals do.  Why?

Because we pay for access to them, and many of them restrict access to investigation professionals, law enforcement, and attorneys.  Also, we know that, for a variety of reasons, a search of one record source is never enough.  For one thing, court reporting systems across the country simply do not upload their case information often enough for us to trust a single records source as being accurate or up-to-date.

We are not trying to inflate the fee we charge you.  We are trying to satisfy the terms of the client-investigator agreement that requires we provide you information that is as accurate and up-to-date as circumstances will allow.

Employment Screening

These can be comprehensive beyond imagination (with a margin for error), and could include Driver’s License and Motor Vehicle Violation records; credit reports; work and family associations; company/corporate associations, address and telephone number histories dating back years and years; name, address, and phone numbers for many current and former neighbors and co-workers; federal, national, state, and county civil and criminal litigation histories; national sex offender registries; Social Security Number verification; liens, Uniform Commercial Code filings; owned vehicle history; owned real estate history; e-mail address associations; reference verifications; and more.

However, potential employers, employers, and information providers in the area of Employment Screening, and Credit Screening are governed by federal laws – the Fair Credit Reporting Act, among others – which places serious obligations, responsibilities, and restrictions upon the provider AND USERS of such information. Among them, the need for screening subjects to submit signed forms authorizing the acquisition of private information, notice to subjects of adverse background information resulting in rejection for employment and credit purposes, and the opportunity for subjects to contest the accuracy of any such adverse information.

And yes, these federal laws apply even if you are hiring a babysitter, or rather, if you use this information to reject a babysitter applicant!

Note that researching an applicant's social network activities (Twitter, Facebook, Google+, etc.) is extremely risky and may subject the employer to liability if the social network  history is used to reject an applicant.

Fortunately, it is not horrendously difficult for the average person to comply with these laws – it just slows down the process by a few days, requires the job applicant to sign a form, and the employer to let the rejected applicant know the reason for the rejection. 

Background Checks

This is detailed, in-depth personal history research that can include all of the above information except Credit, Driver’s License, and Motor Vehicle Violation records, and SSN verifications, for example.  It may still be extremely detailed and comprehensive, but will not include the sensitive private information covered in an Employment Screening Report.

These “background checks” can be extremely informative and useful when they are all a client needs for a particular purpose.  And really a client very seldom has a genuine need to know someone’s credit report information.  Access to, or possession of, such information is fraught with risks, such as later allegations of identity theft.    

Due Diligence

Due Diligence broadly refers to the level of judgment, care, prudence, determination, and intensive activity that a person would reasonably be expected to exercise under particular circumstances.

I cannot state this clearly enough: DUE DILIGENCE IS NOT SATISFIED BY AN ONLINE BACKGROUND SEARCH.

Translation: Someone researching the personal, business, and financial history of an individual or company by sitting behind a desk and pulling reports off the computer – even from proprietary subscription-only paid databases – CANNOT satisfy the strict requirements of Due Diligence.  The records research is only one part of the Due Diligence process.

At the same time, Due Diligence is not the responsibility of the investigation agency. It is the responsibility of the client who is evaluating a potential business transaction.  And there are sub-categories of this responsibility, including Business Due Diligence, Legal Due Diligence, Accounting Due Diligence, and Special Due Diligence.

Yes, database record information can be extremely useful, WHEN it is used to instruct the client on the specific areas in which he or she must commission additional investigation to “drill down.”  This drilling down can involve sending investigators into the field perhaps to obtain photographic and video evidence; to travel to the courthouse to obtain actual court records and case files; to conduct interviews, surveillance, and financial analysis; to examine the subjects actual business records; and so on.  

But the Due Diligence process is much more than a simple “Background Check,” and because it can involve sending investigators into the field, hiring accountants, etc., it is very costly.  The cost ought not dissuade an individual or company that is trying to determine whether to enter into a business or investment relationship valued at millions of dollars - although you would be surprised, sometimes.  But for smaller deals, intensive, true Due Diligence is seldom performed.

The point being: Do not let someone sell you a “Background Check” for many thousands of dollars by calling it “Due Diligence.”  First, it isn't. Second, performing Due Diligence is the client’s responsibility – investigation agencies merely provide some of the information needed for evaluation - usually in the form of a Background Check, unless the client commissions more in-depth investigation.