A background check or background investigation is the process of
looking up public records, commercial records and financial records
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
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:
Maintaining market confidence
Promoting public awareness
Reducing financial crime
Pre-employment screening in the US
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.
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.
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.
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.
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.
Credit scores, liens, civil judgments, or bankruptcy may be included in the report.
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.
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.