Why 'Standard' Digital Background Checks Can Be So Unreliable

A white checkmark in a red circle on laptop screen. — (Image credit: Getty Images)

We have all seen news stories about drivers for ride-sharing services who are arrested for sexually assaulting a passenger or committing some other violent crime, and it is revealed that the employee has a lengthy — often recent — criminal record.

The first thing most of us think is, “Didn’t the company do a criminal background check or other pre-employment screening?”

Also, consider this nightmare two of my readers are going through right now:

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“My wife and I are in our 80s and have a rental home. Our property manager ran a detailed computerized credit and background check on a potential tenant, who passed with flying colors and moved in. However, his deposit and rent checks bounced. We are dealing with a serial squatter! In just 10 minutes, our grandson — an IT college major — uncovered a pattern of similar behavior going back over 15 years! How can this be explained?”

Of course companies all over America do indeed conduct background/pre-employment screening, but at least 45% of those checks are essentially useless, according to California-licensed private investigators Riley Parker and Jane Parker.

They strongly maintain that, in addition to unreliable data, stringent new federal and state rules on privacy the past several years — that make it much more difficult to discover disturbing things about a prospective employee’s or tenant’s past — have resulted in otherwise preventable criminal behavior.

H. Dennis Beaver

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column. "I love law for the reason that I can help people resolve their problems," he says. "I know it sounds corny, but I just love to be able to use my education and experience to help — simply to help. When a reader contacts me, it is a gift."

Standard background checks do not promote safety

I was contacted by Jeff Lebo, J.D., who has been general counsel for large, faith-based, nonprofit background-search companies. His goal is to wake up the public to the risks of “standard” background/credit/pre-employment screenings, “which do not provide safety — far from it,” he says.

He notes that “one of the leading causes of preventable tragedies in the workplace and communities” is the failure of a standard background or pre-employment search to unearth previous bad acts. “In order to be accurate, (background checks) must be conducted internally, using primary source reports, so the employer remains the decision-maker. Relying on multibillion-dollar background-check companies means outsourcing your duty-of-care decisions to entities focused on maximizing profits for shareholders, not protecting employees or the public, at the expense of lives.”

He adds, “Employers and landlords blindly trust these companies that use commercial databases — that are different from data broker databases, which generally have a much wider range of information — remaining under a delusion that (the companies) provide safe and thorough screening.”

Tragic outcomes because of missed criminal histories

The results are million-dollar verdicts for negligent hiring and, worse, children being molested at camps and daycares by offenders with long criminal histories that should have been exposed. We read about this so often. I have learned that employers think they’re getting thorough screening, but in reality, they’re just receiving reports from automated data dumps that don’t include critical information.

To make matters worse, several hiring managers I’ve spoken with — who insisted on remaining anonymous because they aren’t authorized to speak for their employers — admit to relying on background-check companies that use contracts containing liability waivers stating their searches are incomplete. Surprisingly, few companies had any interest in going back to established methods of vetting job applicants by personally checking references, searching court records, etc.

Lebo’s cynical view: “Despite knowing the risks, these organizations always choose the fastest and cheapest option. Even worse, many use payroll and staffing companies for screening, which is like having a foot doctor perform open-heart surgery.”

The Parkers agree, adding that the investigative work that once made background checks meaningful has disappeared, replaced by flawed systems that leave businesses, schools and communities at risk.

I urge anyone who doubts this to spend some time on Lebo’s website.

An approach employers should consider

New York-based job search and career coach Jeff Altman knows that online employment data is not always reliable.

“Given opt-out websites that can remove your identity and past (from online databases), an employer is much better off doing an actual, in-house background check, speaking with people who can verify independently what appears on a job application. This means being old-fashioned by checking references, as otherwise you are limited by data which isn’t necessarily trustworthy.”

Altman has an effective way of reducing the chances of hiring someone with a dubious past:

“One way to scare off the people with red flags in their background is by telling them, ‘We will do a background check once you are on the job and will personally verify your references. If you have provided us with inaccurate, false or misleading information on your application, these will be grounds for immediate termination.’ (Shady) people will get scared and decide not to join your company, as the threat of post-employment termination is enormous.

“The person tries so hard to get a job, finally gets one and then a month later has to come home and tell their spouse and kids that they got fired because they lied on the application. It is devastating!”

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, You and the Law. Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."