Part 1: Not All Background Checks are Created Equal
October 11, 2018
The term “background check” is not particularly well-defined, as it can mean many different things depending on the scope and the intent of the results. Background checks can also vary from type to type, and from vendor to vendor.
If you’ve never purchased a background check solution (or a background check at all), you may be wondering which ones you’ll need to meet your specific business goals, and, of course, how much they’ll cost. Some companies need to perform more comprehensive background checks with greater diligence of results, while others may not need a thorough check and opt for a less stringent check for financial reasons.
Before determining which specific background check is right for you, it may help you to understand the basics of FCRA (Fair Credit Reporting Act), and, more importantly, to know whether or not your company is required to comply with this regulation.
FCRA is the act that regulates the collection of credit information and the access to credit reports. It was passed in 1970 to ensure fairness, accuracy, and privacy of the personal information contained in the files of the credit reporting agencies.
FCRA compliance is required for companies that are using personal data for:
- Hiring a new employee
- Screening a tenant (renter, sublease, room-share, etc.)
- Checking credit scores for purposes other than employment and tenance
Though the FCRA language is notoriously fuzzy, we find that it’s best practice (and not overly difficult) to implement more diligent background checks that ensure a company remains on the safe side of the law. Companies that toe the line by skimping on diligent, comprehensive background checks are taking a gamble that a concerned citizen won’t bring a class-action lawsuit for non-compliance.
There are four main steps that you have to follow to stay on the right side of the law.
Disclosure: Candidates must understand that you are conducting a pre-employment screening as a pre-condition of an offer.
Consent: You need to obtain the candidate’s consent, typically in written form, as well as making sure they receive full notification of the agency conducting the check and their rights under the FCRA. The candidate must also provide sufficient personal details for the check to get underway.
Investigation: The report is compiled once the candidate has provided sufficient personal details for the check to get underway.
Review: you will receive the report which will typically be marked “clear” (go ahead and employ) or “consider” (something of concern has been found) depending on the agency you’ve appointed.
– Source: Workable
Here’s a snapshot of the primary background checks used today, ranging from least to most compliant and diligent:
- National Criminal Screen
- Progressive Background Check: National Criminal Screen + Counties Where Adverse Records are Found
- Background Check: Current County of Residence, or Single County
- Background Check: 7-Year, All Counties of Residence
1. National Criminal Screen
Obtaining accurate background checks by simply running a National Criminal Screen is tough because the data is so disjointed. There are more than 3,000 counties in the U.S., of which only 1/3 actually report their criminal data to the national criminal database.
The National Criminal Screen is a non-authoritative search of aggravated criminal records that is best used in instances where only the most basic of checks is needed. Simply put, it will give you some coverage but it’s far from comprehensive. It’s considered to be extremely low diligence, and should not be used as the only criteria to determine a candidate’s suitability to participate on your platform.
- Good for tip and lead search
- Good for finding criminal records outside of counties the user has lived in
- Not useful if greater diligence and accuracy is needed
- Example: 100% of New York City residents need a county check, because borough counties don’t report their data to the national database.
- Not comprehensive and not FCRA-compliant
- Example: If a criminal record is found on the National Criminal Screen, companies will often add a County Search to obtain authoritative data and allow the user the opportunity to dispute a report, per FCRA regulations.
This can be the most cost-effective option, but it is the most unreliable and also not FCRA-compliant, so it is also the least diligent. Companies that only conduct a National Criminal Screen should be aware of gaps in the results due to reliance on non-authoritative data. This check is rife with transmission issues, incorrect or missing data, and may include results that appear to be a criminal record, but actually are not.
2. Progressive Background Check: National Criminal Screen + Counties Where Adverse Records are Found
Progressive Background Checks are a good option –– they’re still considered less diligent than other background checks, but more comprehensive than using National Criminal Screens exclusively.
Adverse action is a legal process companies must follow if they’re considering not hiring a someone based on information that was found in their background check (e.g. a candidate is not hired based on their criminal record.)
When adding adverse records to the National Criminal Screen, county data is scanned if a flag is found in the national criminal database that indicates the applicant might have a record.
3. Background Check: Current County of Residence, or Single County
This check also begins with a National Criminal Screen, and then searches the courts that have jurisdiction for the county in which the applicant lives. With the Progressive Background Check, you would only cross-check with the county database if you were acting on a tip from the National Criminal Screen. In this type of background check, you would still review the single, current county in which the applicant resides. This check provides low diligence, but it does return authoritative information that can be used to determine if a candidate is suitable for your platform.
This check can be used in FCRA-compliant processes, and is best suited for:
- Companies and industries with intermediate legal or insurance requirements
- Organizations that require a moderate certainty from their background checks
- Less sensitive applications like meal delivery, lawn care, retail or eCommerce, freelance or part-time employment, etc.
4. Background Check: 7-Year, All Counties of Residence
This check is the most diligent. It also begins with a National Criminal Screen, and then searches for criminal records in each county in which the individual has resided for the past 7 years. This high-diligence check will return authoritative information which can be used to determine a candidate’s suitability for your platform.
This check can be used in FCRA-compliant processes, and is best suited for:
- Companies and industries with stringent legal or insurance requirements
- Organizations that require absolute certainty from their background checks
- More sensitive applications like caregivers, insurance, healthcare, legal, general full-time employment, etc.
Consumer Reporting Agencies (CRAs) like Evident are responsible for, among other things, retrieving information about the candidate or applicant from the data source, and presenting it to the organization requesting that information.
The difference between our solution and other background check providers is that we encrypt personal data so that the individual’s privacy is protected, and so that the company can reduce their liability and risk by eliminating exposure to any sensitive data.
With rigorous access controls and user consent processes, our platform lets the applicant decide who sees their personal data and when, which also helps businesses comply with increasingly strict data protection regulations.
Understanding the types of background checks that are available is only the first step. In Part 2 of our series, we’ll discuss the differences in background check providers and how you can compare offerings while still meeting your business needs.
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Read other blogs in this series:
Part 2: Not All Background Check Vendors Are Created Equal
Part 3: Not All Background Check Vendors Use Identity Verification