A background check or background investigation is the process of
looking up public records, commercial records and financial records
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
Regulation
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
Pre-employment screening in the US
Laws
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 Reporting Act (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 records. 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 to the employer obtain
a credit report.
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 offender registry, credential verification, reference
checks, credit reports and Patriot Act searches are becoming
increasingly common. 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.
Reasons
They are frequently conducted to confirm information found on an
employment application or résumé/curriculum vitae. 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. In the
United States, the Brady Bill requires criminal checks for those wishing
to purchase handguns from licensed firearms dealers. Restricted firearms
(like machine guns), suppressors, explosives or large quantities of
precursor chemicals, and concealed weapons permits also require criminal
checks. 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 children.
Possible information included
The amount 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. The most commonly used criminal searches by
employers who outsource is the county criminal search, which is the most
widely used search by legitimate background screening firms due to its
accuracy in comparison to database searches. ABC News covered a story
about incaccurate database criminal background checks and the lawsuits
that have resulted from employers using the information for hiring
purposes.
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.
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 judgments, 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
disciplinary actions.
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 employee.
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.
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, and family members; however, extensive heresay 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 expensive litigation.