Part 3: Not All Background Check Vendors Use Identity Verification

November 27, 2018

In Part 1 of this series, we highlighted the differences between the main types of background checks, and in Part 2, we explained the key differences between background check vendors (Consumer Reporting Agencies, or CRAs) and the various services they provide.

The third and final installment of our background check series emphasizes the importance of pairing background check processes with identity verification, beginning with a brief overview of what identity verification is and why it’s important for businesses.

Identity verification has existed for hundreds of thousands of years in the form of tattoos and skin markings. Eventually, passports, social security cards, driver’s licenses, and other forms of physical identity were introduced, and are still considered the gold standard for assurance.

The advent of the Internet changed the way our society was forced to think about verification, as many businesses transitioned their services online, and as digital identities emerged. Today, a wide range of identity verification techniques are used both online and in person to confirm that an individual is who they say they are.

Modern organizations now largely implement identity verification as a means to:

  1. Prevent fraud (and costs associated with fraud)
  2. Comply with federal regulations like Anti-Money Laundering (AML), Know Your Customer (KYC), Customer Identification Program, and more
  3. Meet their customers’ growing demand for digital experiences

These are just a few reasons why identity verification is essential to the transaction ecosystem, and a vital component to cybersecurity for all industries, especially financial institutions, eCommerce companies, online gaming, sharing economy platforms, and even social media.

In an era of high-velocity employment (e.g. contractors, tradesmen, laborers, part-time employees, and gig workers), pre-employment screening is no longer optional––as we previously discussed in Part 1, there are different types of background checks available to help businesses reduce risks associated with bad hires––but what happens if an individual uses someone else’s unique personal information to apply for a job? An apartment? A loan?

Background checks do not account for identity theft. Hiring someone who fraudulently uses another person’s social security number in their background check can present an even bigger liability than if the company had hired someone with a criminal record.

Employment-based identity theft is a very real problem, according to the Treasury Inspector General for Tax Administration (TIGTA)’s report entitled: The Number of Employment-Related Identity Theft Victims Is Significantly Greater Than Identified, in which they state that in 2017, there were 548,968 victims of employment identity theft in the United States.

Background checks also don’t account for human error. In some cases, mistaken identity isn’t intentional or nefarious. Some background check vendors with poor user experience, inferior technology, and no verification process to confirm an individual’s existence can inadvertently capture the wrong information from applicants, which can set businesses up for failure if they hire the candidate (or not) based on inaccurate results.

If an individual enters their name, address, and/or social security number incorrectly due to the complexity of the field forms, or due to an unavoidable autocorrect feature on their mobile device, a background check can either be deemed invalid or worse––it can reveal completely different results based on someone else’s record.

The gravity of this scenario is underscored by some very real privacy implications, presuming the incorrect data belongs to another individual who did not consent to the background check.

Companies that are thinking of using identity verification in tandem with background checks, account creation, and other relevant applications should take the following into consideration:

  1. Identity verification provides a necessary layer of insurance for any organization that conducts background checks, especially for those that are cost-effective, but offer a lower level of diligence (e.g. National Criminal Screens).
  2. Identity verification does not require a significant investment in research and development to implement successfully
  3. Identity verification can successfully decrease fraud, but it’s important to strike the right balance so as not to increase drop-off rates of new business prospects. Organizations that are too rigid with their verification techniques could be inadvertently creating more friction in the onboarding process. Fortunately, with Evident, companies no longer have to make this choice.

Is Evident Right for You?

Evident’s Identity Assurance Solution leverages intelligent automation to provide the most accurate and up-to-date background check and verification results. Our proprietary API uses encryption to protect individuals’ privacy rights, while protecting companies from the liability of holding their personal data. Request a demo today.


Read other blogs in this series:

Part 1: Not All Background Checks Are Created Equal

Part 2: Not All Background Check Vendors Are Created Equal

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