Part 2: Not All Background Check Vendors Are Created Equal

November 13, 2018

In Part 1 of this series, we highlighted the differences among the various types of background checks, how they range in diligence and cost, and provided some specific use cases for each type.

In the second installment of this 3-part series, we’ll explain the key differences between background check vendors, also known as Consumer Reporting Agencies (CRAs) and the various services they provide.

When selecting a background check vendor, you should first determine the assurance threshold for your specific needs, as there are two distinct types of background check vendors:

  1. Full-service partners that conduct investigative work on your behalf
  2. Background check websites that offer instant results, and allow you to conduct your own online searches

Full-Service Vendors

  • Abide by the Fair Credit Reporting Act (FCRA)
    • Capture consent and provide an opportunity to review (and/or dispute) results
  • Typically operate on a cloud-based system that allows employers to request checks and view results online
  • Take 2-5 days to complete the background check process

DIY Vendors

  • Not FCRA-compliant
    • Terms of use typically state they are not be used for pre-employment screening
  • Charge about $10–$50 per background check (depending on the information type)
  • Provide instantaneous, but sometimes incomplete or flawed results

Deciding between these two types of vendors comes down to how in-depth you need your reports to be. If it’s important that your organization comply with federal regulations, or if you feel the need to provide a more diligent level of confidence, you may want to consider shopping full-service vendors for the right pricing module.

DIY background check providers run the gamut––most provide phone numbers, email addresses, social media accounts, work history, and other personal information, and few offer true criminal background check results with 100% accuracy.

If you choose to implement an FCRA-compliant background check program and opt to hire a full-service vendor, beware that there are quite a few distinctions between each CRA’s services that require you and your team’s consideration.

Here are a few topics to discuss as you begin shopping around for a background check partner:

1. User Experience

A lot can go wrong if the vendor’s user experience is subpar. There’s a higher margin for error when individuals fill out forms on their mobile devices (e.g. autocorrect, fat fingers, etc.), and if the candidate accidentally enters incorrect data, the company could pull the wrong record and make an uninformed hiring decision, which could be detrimental for both parties.

Questions to Ask the Vendor

  • Does your platform offer a good candidate experience?
  • What is the average turnaround time for checks?
  • How does the individual input their data on your platform?
    • How much typing are they doing via their mobile devices?
    • Can they take a photo of their ID to populate the data instead?
  • Do you have a portal where I can order background checks and view the results?

2. Regulatory Compliance

Some full-service background check vendors present individuals with disclosures upfront and collect the necessary authorization to conduct the background check. Companies that are required to comply with FCRA should only consider vendors that offer this service––those that don’t could run the risk of a class-action lawsuit in the future.

While every U.S. state is obligated to comply with Equal Employment Opportunity Commission (EEOC) regulations, select states like California, Georgia, New York, and 30 others have taken them a step further (e.g. limiting the look-back period for background checks, or banning the application checkbox that denotes whether a candidate has criminal history) in an effort to prevent bias against candidates with convictions or arrest records.

In accordance with these laws, organizations may want to consider background check vendors that have regular access to the most up-to-date data from authoritative sources, and that aren’t running background checks against a stale database.

Questions to Ask the Vendor

  • Do you present data disclosures (per FCRA compliance)?
    • If yes, how do you present the disclosures?
  • Do you collect background check consent (per FCRA compliance)?
    • If yes, how do you collect consent?
  • Is your background check database static or live?
    • Which authoritative sources do you reference for the most up-to-date data?
  • Do you offer ongoing criminal alerting to catch anything we may have missed between background checks?

3. Normalized Data

Some full-service background check vendors deliver completely raw, unfiltered background check reports to the organizations that request them. This sounds great in theory, but sometimes more isn’t better. On the contrary, it’s quite frustrating for companies to translate the data so they can understand what each crime actually means and how it fulfills or violates their background check policies.

Unfortunately, there is no “norm” when it comes to criminal activity––each state has a different interpretation of the law and will enact varying degrees of punishment for breaking them. For example, individuals who are arrested for throwing a brick in the state of Florida are charged with “throwing a missile,” which can lead to some serious misunderstanding if it crops up in a background check report.

Questions to Ask the Vendor

  • Can you help me select data characteristics that would qualify or disqualify a candidate?
  • Do you normalize the data so I don’t have to figure out what each crime means and how serious the offense is on my own?
  • Will you filter the results so that it’s easy for me to understand whether or not a candidate is suitable for hiring based on my company’s policies?
    • Will you provide me with “clear” or “violations found” responses to simplify and speed up my hiring process?

4. Automated Assessments

Full-service vendors can manage the entire background check process from start to finish, but without automation, the company is responsible for approving every step along the way, which can create bottlenecks and distract them from their daily tasks.

If a record is found when conducting a background check, vendors that use automation can take a company’s adjudication preferences into consideration and make the executive decision to go into pre-adverse action automatically without the added step of getting the company involved. This both alleviates the burden on the organization, and moves the candidate through the hiring funnel at a faster rate.

Companies that don’t have the time and/or resources to devote to adverse action disputes and resolutions may want to consider a vendor that automates individualized assessments.

Questions to Ask the Vendor

  • Is the technology easy to use and configurable?
  • Will it integrate with my applicant tracking system (ATS)?
  • How is the customer service?
  • If a record is found on a background check, can you automatically conduct individualized assessments for me, or will my team have to handle it?
    • If you’re able to automate this task, will it require my team’s approval?

5. Data Security

Personal data is very useful for background checks, but what happens to that data once the company has hired the right candidate? This is the point where data is no longer an asset, and is now considered a liability. Organizations that store sensitive personal data are at risk in the event of a breach––cyber criminals have become more sophisticated and can easily steal the data to ransom it, sell it to a third party, or worse, use it for identity theft.

Questions to Ask the Vendor

  • How secure is your background check technology?
    • Do you use encryption to protect Personally Identifiable Information (PII)?
    • If not, how do you ensure that the individual’s data won’t be exposed?
  • How does your platform store the individual’s data?
  • How do you share the data so my company isn’t liable for storing it ourselves?
  • Can you provide me with the data in the event of an audit?

Companies that perform background checks can outsource as little or as much as they want to CRAs. It is important to note that the company is ultimately responsible for making hiring decisions and maintaining compliance with the Fair Credit Reporting Act (FCRA) and other similar regulations.

Is Evident Right for You?

Evident’s unique distributed data approach eliminates exposure and risk due to asymmetric cryptography––in other words, we give the candidate a personalized key to access their data that the company doesn’t have. Our API is FCRA-compliant and consolidates data from hundreds of the most accurate, authoritative sources (like Marsh and Urjanet) into a single, seamless user experience. Request a demo today.



Read other blogs in this series:

Part 1: Not All Background Checks Are Created Equal

Part 3: Not All Background Check Vendors Use Identity Verification

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