Employment Background Checks Gone Wrong

ABC News released an article on August 29, 2011 covering what can happen when consumer reporting agencies (CRAs) provide employers with misinformation. The article, “Background Check Wrongly Says Job Seeker is Sex Offender,” recalls the story of an individual who was in the final hiring phase for a new job when a background check wrongly identified him as being on a national list of registered sex offenders.

employment background checks

According to the story, the background screening company (a CRA) failed to verify that the results appearing in the national sex offender report indeed belonged to the person the company was supposed to be screening. As a result of the report, the applicant claims he was not hired.

In failing to verify the results, the screening company also reportedly failed to meet its obligation under the Federal Consumer Reporting Act (FCRA), which says if a CRA provides a database report without verification, the subject of the report must be notified at the same time as the end user of the report. That way, the subject (in this case, the applicant) has an opportunity to correct the findings before the company makes an adverse decision against hiring him.

If you read either of our recent blog posts, “Why You Might Want to Fire Your Background Screening Company,” or “Why Doing Nothing is Better Than Doing It On the Cheap,” you will gain some insight into how this might have happened.

Four points are worth emphasizing:

    1. A best practices background screening methodology must include the use of a national criminal database BUT (and that’s a big but) its use should be limited to being a tool to scope the background check. It’s only to be used as a tool to guide local-level records searches. (Read more on the use of national criminal databases.)
    2. Database searches are inherently incomplete. To rely on a ‘national’ database as the end-all-be-all source of information is a dangerous practice.
    3. The Fair Credit Reporting Act requires, among other things, that CRAs maintain strict procedures designed to ensure that public record information used to make employment decisions is complete and up to date.
    4. Companies that sell database searches without verifying the identity of the subject do not have your best interests in mind.

Returning to the ABC News article, we find it interesting and disconcerting that the attorney quoted in the article would remark, “The big agencies like Lexis Nexis that do more things are covered, but it’s certainly true that the law has written out smaller companies that do only background checks, and there are all these widespread problems.”

Really? So the $20M class action settlement against Lexis Nexis is completely unfounded? It’s only the small companies that have problems?

Regardless the size of the CRA, we’re all beholden to the same regulations concerning our obligation to ensure the accuracy of the data we provide to employers. Some of us take our obligation more seriously than others.

The reality is, nearly every time you read about a criminal background check being a problem it tends to come down to someone irresponsibly using the database.

The answer is not additional regulation. The regulation is already there.

The answer lies in understanding that when innocent people who are otherwise qualified to be contributing members of your workforce don’t get jobs, employers lose just as much as job-seekers. The message to employers is that it pays to hire a quality background screening firm. Take the time to ask the right questions and don’t get caught penny wise and pound foolish.

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About MichaelGaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
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