Many people misrepresent their background and credentials, that's why it is important to do at least a little checking to see if what the applicant says about his or her background is true. Many employers do not do any checking, and they often regret that decision. The applicant may be unqualified for the job, or may have some personality trait or experience that causes problems for you later.
If your applicant will have contact with other employees or with customers, an important reason to do that checking is to avoid negligent hiring claims. If you have an employee who turns violent and harms either a customer or another employee, you could be slapped with a lawsuit if reference checking would have kept you from hiring that person.
If an applicant is going to be handling large amounts of money or exercising financial discretion at your business, you may want to run a credit check. Unless you're worried about the applicant stealing money or expensive equipment, a credit check probably won't be necessary. There are a lot of federal restrictions on credit reports, so doing them can be more trouble than it's worth.
Background reports can range from a verification of an applicant's Social Security number to a detailed account of the potential employee's history and acquaintances. Here are some of the pieces of information that might be included in a background check. Note that many of these sources are public records created by government agencies:
- Driving records
- Vehicle registration
- Credit records
- Criminal records
- Social Security #
- Education records
- Court records
- Workers' compensation
- Bankruptcy
- Character references
- Neighbor interviews
- Medical records
- Property ownership
- Military records
- State licensing records
- Drug test records
- Past employers
- Personal references
- Incarceration records
- Sex offender lists
Why background checks are necessary?
- Close the loop on identity verification - Background Check provides additional details when your institution can't make a reasonable determination to open a new account or employ a new person. If there are multiple persons associated with a particular social security number or if the prospective customer is young or new to the US , you need more information to verify the identity and Background Check can supply that knowledge.
- Recover Social Security Numbers - Do you have a list of customers with invalid social security numbers? Avoid IRS fines. It only takes Background Check a couple of seconds to find the number for you.
- Find people or assets quickly - Background Check allows you to secure your institution's resources by providing contact information for possible associates, relatives and neighbors so your institution can quickly find people to recover assets.
- Validate employee information - A recent study by the Society for Human Resource Managers found that 53% of job applications contained false information. Background Check allows institutions to detect misleading information during the new hire process.
- Reduce Fraud - Background Check offers information that allows action to be taken before fraud occurs. The Association of Certified Fraud Examiners notes that the average organization loses more than $9 per day, per employee, and 6% of its annual revenue to fraud and abuse.
