What the Trend in Online
Databases Means to the Employment Screening Industry
The most prominent trend in the employment screening
industry has been a proliferation of online databases
offering cheap background checks. Any one can access
the internet and with a quick search be able to
purchase, for example, criminal records for a low
fee. While that is very appealing to companies looking
to trim the budget on background checks, it may
in fact be a dangerous trend.
What do the companies say that have been running
background checks, back when employment screening
“industry” was just a concept and not an accepted
practice?
Tom Lawson, the founder of APSCREEN,
the oldest screening firm in the country, says “The
necessity of a background check has been established
now, and that’s why we are seeing such a proliferation
of people getting into the business – particularly
because the internet makes it an easy field to enter
because of the low start-up costs.”
Lawson continues, “But back in 1980, when we
practically invented the concept of employment screening,
companies had to be convinced that there was a good
reason to spend money on background checks. We have
always been a business that focused on training
our specialists to screen applications for completeness,
thoroughness and accuracy and provide our customers
with individualized service. This trend of online
databases is very disturbing to us because the potential
for error and liability is very high.”
The Dangers of Databases - Caveat Emptor
of the Quick Turnaround
Databases are only as good as the search logic used
to retrieve stored data, and search logic is expensive
and only as good as the amount of money the database
companies are wiling to invest in it. Unfortunately,
the advent of the internet has made starting an
online business easy for anyone. As a result, many
companies that start an internet “data selling”
business do so because the start-up costs are small
which means the databases can only provide limited
information.
Even worse, most online database providers lack
an intimate working knowledge of how to screen potential
applicants. Their focus is on selling units of information
for profit.
Database companies cannot simply use off-the-shelf
software to retrieve publicly compiled repository
information. It comes in too many proprietary “operating
systems’ and while good, expensive search logic
helps to delineate between the different languages
of the information entered into the database company’s
archival system, it can NEVER be 100% “competent”,
even if it is a very “robust” retrieval architecture.
By the sheer science of databasing, 100% information
retrieval capability is impossible, unless (as demonstrated
recently by the IRS and FBI Computer fiascos) the
“source” data originates from wholly compatible
systems. This means that going in you can never
expect to have a complete file when you compile
data from different systems. This results in “data
drops” in which bytes of information mysteriously
disappear, as well as computer viruses which can
reside undetected in mainframes for years and indiscriminately
wipe out data, which would be undecipherable in
a foreign operating environment, such as a third
party compiler.
A classic example of this occurred on January 17,
1990, when screening client District Cablevision
received a now infamous incorrect report of a felony
cocaine conviction on one James Russell Wiggins,
which was not verified for accuracy or its relationship
to the subject Wiggins, and which resulted in a
serious elimination of candidacy lawsuit brought
against the provider based upon slander. This error
dealt a major blow to the reputation of the provider
and resulted in the payment of a substantial monetary
settlement. (US District Court, District of Columbia;
Civil Action 90-199; Wiggins (et al) v. Equifax
Services, Inc. (et al).)
Database companies outnumber legitimate employment
screeners almost 75 to 1 in the industry today.1
The main problem with such vendors who advertise
“nationwide criminal checks,” “statewide criminal
checks,” “instant”, or “online,” is the veracity
of the data they are selling and the competency
of the search used to retrieve the data.
Many vendors acquire data from a multitude of sources,
not having any idea who compiled the information
in the first place. This data is then combined into
each vendor’s own format, which often does not contain
complete information. The common term in the database
industry is “data drops,” which in addition to the
above meaning also means that not all of the data,
such as criminal record information from a court
jurisdiction that is put into the database, is available
to be extracted, retrieved or researched. This occurs
because of the following:
1. The bridge software used to import the jurisdictional
data into the database company’s memory banks can
never be 100% reliable, as long as the compiler
is gathering information from “foreign” repositories
2. The computer has to handle many different formats
while compiling information into a standardized
format so that some of the data simply does not
transfer.
1 Ernst, Carl R., Sankey, Michael, Eds, The Source
Book of On-Line Public Record Experts. 1996
This is a problem because of the technical department’s
inability to inform the sales/marketing department
properly as to the database’s limitations or unwillingness
to tell the customer that the product it is selling
may be deficient in some areas. As a result, approximately
5 to 8% of the data is lost. That means that there
is a 92% to 94% chance (at best) to identify a record
on a candidate. Also, data drops are indiscriminate.
Rape convictions are dropped as easily as traffic
tickets.
The second problem with databases is the psychological
dependence they engender on those using them. As
time progresses, the databases’ ease-of-use causes
the user to forget just how important it is that
the database be accurate and complete, and that
the need for thoroughness in screening an employment
candidate should never vary, as to ensure consistency
in the screening process, thus precluding the successful
prosecution of the employer for Title 7 claims.
The results of falling into this pattern of laziness
can be disastrous as litigation may not be far behind.
Crucial Steps in the Employment Screening
Process
Historically, and until the late 1970s when the
“personnel” department recognized the need to get
involved in employment screening, background checks
were performed by security departments – typically
comprised of highly qualified, and often retired
professionals.
Today it’s up to the HR department to create the
mandatory steps needed to develop a thorough employment
screening procedure including for starters, a Positive Candidate Identification® process. If this isn’t
the first step in the background check, the results
of your searches could be faulty and therefore prove
useless.
For example, critical identification data needs
to be gleaned from credit bureaus and other repositories
including unused maiden names, or intentionally
omitted information such as date of birth and variations
in social security numbers. This is where the difference
between true employment screeners and data sellers
comes into play. It takes years of experience to
be able to differentiate, for example, intentionally
omitted information versus an honest mistake.
The same holds true for incomplete disclosures
such as partial criminal history in which the full
story can dramatically change your assessment of
the applicant. One such case involved an applicant
who disclosed to the company that she was convicted
of trespassing. When the criminal check came back,
however, it was discovered that while she had indeed
told the truth that she was convinced of trespassing,
she had also been convicted of trafficking in child
pornography and possession of controlled substances
– a serious error by omission.
Hiring decisions must not be made on partial, incomplete
or incorrect data, but on thorough information and
a consistent application of thorough scrutiny of
all of the information regarding criminal, credit,
work and education history, driving attitude, whether
or not the candidate has completed the application
completely, as well as identity disclosure.
A screener must have extensive knowledge about each
vendor source to make the appropriate follow-on
decisions that develop into a full and comprehensive
report.
Online databases don’t provide highly trained researchers
who can spot “red flags” and other indicators in
an application that demand further consideration.
You can only get this kind of service from an interactive
screener who has years of experience in processing
background checks.
Another reason online databases can be cause potential
liability is because most databases contain information
that may not be used in the screening process such
as arrest records, or unadjudicated matters, or
matters for which an expungement exists at the Court
but is not reflected in the database.
As previously stated, professional background checks
require an experienced researcher who knows what
to look for including: verifying a applicant’s true
identity, obtaining verification of past employment
and education, fully investigating the applicant’s
criminal past (a skill that requires an intense,
and multi-level knowledge of court procedures, credit
evaluation including legal records such as bankruptcies,
tax liens and judgments, driving analysis, as well
as a history of being a sex offender or involved
in domestic violence or retraining orders for stalking.
All of the factors contribute to, but may not necessarily
be germane to the job description, at hand, and
while exciting, could lead an employer into court,
for using the information to deny candidacy, for
inapplicability.
By now it should be fairly clear that professional
background checks are a comprehensive package that
far outweigh any “bits and pieces” of information
that can be provided by any individual online database.
When a person is thinking about hiring someone and
they believe that “all I really need to do is run
a fingerprint check,” they are really missing the
point. So much more information is needed to make
a careful, informed hiring decision. Besides, only
police departments run fingerprint checks, not employers.
Liability Risks of Not Performing Background
Checks
In today’s hiring environment employers face ever
increasing potential for liability from the workplace
when they choose not to do background checks on
their news hires. Those liabilities include:
• Premises liability for not safeguarding customers
from employees who steal, lie, cheat or injure
• Negligent hiring liability in the event of violence
or fiduciary malfeasance, for not providing other
employees a safe place to work
• Termination or investigation of the individual
who hired an applicant who later steals from the
company or exposes the company to the above-mentioned
liabilities.
• Litigation under officer/director liability theories
because of incompetent or inept hiring practices
involving the company and/or person who hired the
employee
To prevent this type of litigation, a company must
have established a refined HR policy that includes
a professional employment screening component.
You must become knowledgeable about employment laws
which a good background screener can help you with.
For example, did you know that it is illegal to
make a decision to not hire someone based on an
arrest record alone? Usually, the only time it is
legal for a third-party provider to release arrest
information is in the case of daycare providers
and nuclear facility workers. An employer, generally
is not allowed to ask about arrests and cannot use
this information to deny employment
Critical Tips For Choosing an Employment
Screener
So what should you be looking for in an employment
screening company?
First of all, look for longevity. The longer a company
has been providing background checks, the more experienced
it is, and as a result, the knowledge, they will
have in recognizing the signs of a “suspect” applicant.
This is a field where screeners need not only be
highly trained, but have extensive experience.
Ask for references and then call them. You want
a company with an extensive and positive track record
of providing factual information so you can make
an informed hiring decision.
Look for the company’s professional memberships
in organizations such as ASIS, SHRM, PIHRA, NPRRA,
NAPBS, as well as others. This indicates a combined
knowledge of the screening and security industries.
Do you as the hiring company; have a complete knowledge
of employment law? If not, you need your screening
company to know the laws involving background checks.
If is extremely beneficial if you hire a company
that has an acute knowledge of “negligent hiring”
practices, much in the way that an Expert Witness
would know.
The company should have an intimate, thorough and
long-term knowledge of the Fair and Accurate Credit
Transactions Act (FACTA), and the Fair Credit Reporting
Act (FCRA), as well as Sarbanes-Oxley, the Gramm-Leach-Bliley
Act, and the myriad local statutes that may or may
not apply to the employment process. They should
also have the ability to testify for you in a court
of law if need be; or even better, keep you out
of court in the first place!
Does your prospective screener have knowledge and
understanding of current HR management systems?
How about corporate due diligence programs or factual
employment screening programs that train people
to find fraudulent applications and false identities?
Are you beginning to see how there is so much more
to background checks than first meets the eye?
In short, can your vendor help keep you from unwanted
litigation? Unless you or someone in your company
is an expert in employment law, you are putting
your company at significant risk by using an online
database provider. If you are using any of the multitudes
of online databases, it’s not likely you are protected.
Not only do these online companies increase your
risk of exposure, they may even add to it. For example,
let’s say you are currently using an employment
screener that does not require you to provide a
signed release for each applicant. Sounds relatively
harmless, doesn’t it?
The truth is what these companies have done is had
you waive liability to them when you signed up for
an account so they can avoid the time and effort
it takes involved in this critical step. Their focus
in on increasing their sales; which isn’t necessarily
in your company’s best interest.
In the case of a credit bureau audit, your company
is now responsible for producing an original signed
application and therefore also liable if you don’t
have one on file. A good employment screener is
not only a long-term certified credit bureau, they
also provide signatures for these audits on a regular
basis and you should never even know when theses
audits occur. A typical lawsuit of this nature could
cost your company six figures. There is no upside
for a company purchasing background checks to take
this kind of risk.
What type of criminal conviction research, hand-researched
or online databases, does the company provide? Most
companies do not realize that there is absolutely
NO single source of information available regarding
criminal convictions. It doesn’t exist – anywhere.
Do they verify these discoveries against subject
identifiers and if so, how?
Does your online provider claim to have worker’s
compensation claim records? Any information provided
regarding worker’s compensation claims potentially
provides a false sense of security for the user.
The truth is the only records available for worker’s
compensation are appeals, not claims, and much of
the available files are sealed because they are
not as yet adjudicated. This means the file competency
rate for this type of data is about 40% – not good
enough.
Does the employment screener have international
research capability? If not, how will they screen
people you might want to hire from overseas? Without
the kinds of connections and a network of relationships
developed over long periods of time, this information
would be almost impossible to get.
Has the company you want to hire ever been involved
in a litigation themselves for improper screening
processes? Can they provide you with at least three
long-term references? Do they have professional
liability insurance including errors and omissions?
Are they FACTA, FCRA; CCRRA, and G-L-B compliant?
And of course you need to know the practical things
such as cost, turnaround time and reporting method.
Many competent employment screeners are listed in
publications such as the Security Industry Buyers
Guide as well as industry publications such as those
connected with the Society of Human Resource Management
(SHRM) and the American Society for Industrial Security
(ASIS).
What is needed now in this industry is a standardization
of compliance for employment screeners and someone
to step up and create an industry co-operative that
can police it.
Continue this article
with the critical tips for
Choosing and Employment Screener
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