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How to do Due Diligence on Background Check Companies

Posted by Ryan Howard on Wed, Jul 20, 2016  |  Share       

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We regularly write about not only the necessity of background checks but the rules and regulations around screening. With the rise of negligent hiring claims as well as lawsuits related to discrimination and noncompliant hiring practices, we wish to educate readers about how to stay out of a courtroom, hire the right person for the job and keep your focus on your core business. As a third party background screening provider, we also recognize the importance of adhering to the same rules and regulations . 

Here are some factors to consider when hiring a background check company.

What's Important in a Background Screening Partner?

Choosing a background screening vendor is one of many tasks of human resources or hiring managers. In many cases, screening companies come from referrals or an extensive online search. Background check companies generally list what screens they offer and have an online quote form to request a price that meets your needs. 

While many will choose a screening partner based on cost of background checks, a recent survey revealed data accuracy and compliance as the top deciding factor. A trusted background screening partner will recognize that hiring involves risk management. Not only could the applicant be unfit for the job or the company, but a noncompliant hiring process could also increase the risk of litigation for the company. 

Non-compliance in the hiring process could increase the risk of a lawsuit for the background check company as well.

How to Screen your Screener

While our blogs regularly educate businesses to have strong, ethical and compliant policies and procedures, screening companies need these too. Here are some factors to consider when choosing a background screening company:

  • What type of screenings and background check company do you need? Some hiring managers may choose to use internet web services to check on job candidates. Others expect more diverse screenings, more thoroughly vetted information and choose to share liability in the hiring process by using a full-service background check provider. 
  • Do full-service screening companies follow Fair Credit Reporting Act (FCRA) rules? Full-service providers may cost more but they will research and verify that the information retrieved is accurate. They also transparently abide by the FCRA ensuring that the data was conducted with full knowledge (and written consent) of the applicant and the applicant was informed of their ability to dispute inaccuracies. 
  • Is the screening company affiliated with the National Association of Professional Background Screeners (NAPBS)NAPBS requires its members to stay informed on changing legislation and industry best practices. Another suggestion is to begin your search for a screening partner on the NAPBS website. 
  • Has the screening company been involved in any FCRA lawsuits? It happens. Occasionally a third party background check company will be named in a lawsuit, despite their best intentions. These can occur due to noncompliance by the screening agency or the employer with whom the agency was contracted. Ask questions for clarification if you discover a litigation while researching a background check partner. 

Why Are Background Check Companies Named in Lawsuits?

Millions of employment background checks are run every month and much of the time, the applicant is hired. If a candidate is denied employment due to the results of a background check and the employer does not follow the adverse action rules of the FCRA, the candidate may choose to pursue a lawsuit. The employer and/or the CRA (credit reporting agency or background screening company) may be named in the lawsuit.

Lawsuits may be filed due to the following reasons:

  • The applicant was unaware they were being screened. They did not see or sign a written consent form notifying them of the background check. Many times the form is hidden in the application and it should be a completely separate form.
  • The applicant didn't receive a copy of their report. As part of their FCRA rights, the applicant should receive a copy of their background check so they can dispute inaccuracies, especially if they are denied employment.
  • The information on the background check was wrong. It could be a case of mistaken identity, false information - especially as related to criminal convictions - or inaccurate data. 

A Trusted Background Check Partner

When researching a background check company, hiring managers should be aware of the questions to ask to make sure they are hiring a credible partner. An accredited, experienced third party screening company will provide transparency to the strong, secure and compliant policies and procedures during the hiring process. You will know you are working with a company you can trust when they offer guidance throughout the employment proceedings and assist in hiring the right people for the job.

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Topics: A Professional Background Screening Company, Employment Background Screening

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