April 3, 2017

Background Checks

Background checks have become a routine part in the life of the American adult.  From jobs to housing, dating to business, background checks have become a vital tool in the decision-making process for many important parts of our lives.
background checks

The rise of background checks has benefited millions of Americans in the form of increased safety, faster job hiring and wider access to credit.

On the flip side, the increased popularity and widespread use of background checks has also given rise to concerns about privacy and the use (or potential misuse) of background check data. There’s also confusion about the various types of background checks and where the information comes from.

In this guide, we explore the most common types of background checks out there, the information they include, when a background check may be run, and how they can legally be used.

What is a background check?

A US background check typically refers to a tailored report consisting of records about an individual ranging from basic personal details (such as past addresses and phone numbers) and other public records up to work/education verification and credit history – as well as the process used to compile this information.

Background checks may provide public records information gleaned from state and county level courthouses, registrar’s and other local government offices as well as federal records.  Non-public information such as educational records and credit information are acquired from private sources if permission is given.

The scope and depth of a background check report as well as its accuracy can vary greatly depending on the purpose of the background check, which often governs how a background check is conducted and the type of information that can be researched as well as the sources that can be used.

Why are background checks conducted?

There are many official and non-official reasons for why a background check may be conducted. These reasons may include:

  • Pre-Employment Screening
  • Business Due Diligence
  • Tenancy/Housing Screening
  • Online/Blind Dating Safety
  • Volunteer Screening
  • Address Verification
  • Genealogy Research
  • Simple Curiosity

How are background checks conducted?

How a background check is conducted varies depending on the purpose for the background check and the background check company used for the purpose.

All background checks require a name, which may be expanded to include maiden/previous names if applicable. For some US background checks – particularly, online-based informational background checks – this is all that’s required (though more information such as a last-known city/state or age will provide more filtered results).

For greater precision, other background checks may require a full street address (possibly extending to past addresses) or a date of birth. Databases of information that include public records information and other licensed data allow online background check companies to make the links between names, addresses and all the associated available records to provide in-depth reports instantly, even with minimal data.

Other background checks – particularly those conducted for an “official” purpose (see below) – may require a driver’s license number or social security number for a background check to be completed.  Though not a background check in the strict sense, a credit check is sometimes lumped in with the background check process, which also requires a social security number.

These personal identifying numbers help to ensure that all available public or financial records are gathered, which may be a concern in cases where a name may have been changed or an alias was used in the past. It’s also another way to help verify that a person really is who they claim to be (i.e. they aren’t, at a minimum, misrepresenting who they are or, at worst, committing identity theft) as neither a driver’s license nor a social security number are public record and are consequently much more difficult to fabricate or acquire.

Still other background checks such as those for firearms purchases or in applications for certain jobs may also require a fingerprint, which is run through the FBI’s Integrated Automated Fingerprint Identification System (IAFIS). Though it is difficult to obtain a social security number or driver’s license to beat a background check, it’s not impossible, but faking a fingerprint is virtually impossible, which makes it considered to be the most thorough criminal background check screening method available – even extending to some non-US criminals (though it’s not without its limitations – see below).

Who can conduct a background check?

Who can conduct a background check – or the available, legal options for conducting a background check – has a lot to do with the purpose of the background check.

For general, informational purposes, a public records background check can be conducted by virtually anyone, the preferred method typically being an instant online background check. These background checks are initiated using a name (or sometimes maiden name, if applicable) and last known city and/or state of residence when known. As the public records data has already been gathered and organized, preview information, including an approximate age, friends/relatives/associates, and general address history, is generated instantly in list form with all available potential matches sorted by likelihood. Provided the person initiating the search has at least some basic knowledge about the person being searched (such as age or the name of a past roommate or close relative), the preview data can help ensure with a reasonable degree of certainty that the correct person has been identified before the complete background report is generated.

All the available information has already been databased (and is regularly updated), so reports can be generated on demand. To mitigate the risk of purchasing an incorrect or incomplete background check, many online background check companies will offer an unlimited search option to ensure that all pertinent records (such as separate records for married/maiden names) can be pulled for one fee.

As all the information generated is based on public record – and provided the report data is only used for informational purposes – no permission is required from the person being searched and they will not be notified of any search conducted.

Background checks that are used for an “official” purpose (as defined by the Federal Trade Commission) are governed by specific rules that determine how, when, and who can conduct such background checks.  According to the FTC – and the Fair Credit Reporting Act (FCRA) that spells out the background check legislation – background checks used for the purposes of credit (including tenant screenings), insurance and employment purposes must rise to meet certain standards to be legally valid.

While many background check companies, including the instant background checks available online, pull their information from similar sources, only an FCRA-compliant background check conducted by a Consumer Reporting Agency (CRA) guarantees the accuracy of the information provided in a background check report. This means that the CRA will independently verify each detail in the report, sometimes by crosschecking multiple FCRA-compliant databases or potentially going directly to the source (such as a local county courthouse). Not surprisingly, this means that this kind of FCRA-compliant background checks are not instant with a turnaround time of two-business days being typical for relatively comprehensive search conducted by a major CRA.  Further, these background check companies will ONLY take on companies/organizations as clients who are performing background checks for specific permissible purpose (i.e. those governed by the FCRA) – meaning that there is an application and approval process before being able to initiate a search.

FCRA regulations also mandate that the CRA has permission of the person being researched before initiating the background check, which means that they cannot be performed anonymously.  The person being investigated also have the right to a copy of any background check information obtained if an adverse action is taken (i.e. a person is rejected as a job applicant, tenant, etc.), which is part of the reason accuracy is a critical part of the FCRA search.

Licensed firearm dealers – or others with a Federal Firearms License – are required by federal law to conduct a background check to determine the suitability of a prospective buyer for a firearms or explosives purpose.  The system used, called the National Instant Criminal Background Check System (NICS), is primarily a targeted criminal records search rather than a comprehensive background check and may take up to three days to complete.

Where can I get a background check?

Most background checks – whether for informational or official purposes – are generated via an online request. Offline options such as the use of private investigators, lawyers and debt collection agencies may also be used to locate or research someone (though they are also likely subscribed to a web-based public records or similar database).

What kind of information do background checks include?

The information included in a background check is often tailored based on the needs of the person or organization commissioning the background check.

Standard information available with virtually any informational background check – including online background checks – typically starts with anything considered a public record. Among other things, this may include:

  • Local, state & federal criminal records
  • Marriage Records
  • Divorce Records
  • Judgments
  • Liens
  • Bankruptcies
  • Property Records
  • Census Records
  • Address History
  • Past Telephone Numbers
  • Relatives/ Associates
  • Date of Birth

Background checks for a more specific FCRA governed purpose may focus only on certain types of relevant public or personal records information rather than providing a general overview. For example, a pre-employment background check for a retail worker may focus on searching for potential criminal records particularly related to theft while a similar background check for a driver at a trucking company might solely explore driving and traffic offenses.

Other background checks, such as those for charity volunteers, may only provide information on the presence or absence of criminal records (i.e. a yes or no) rather than specific details about the offenses or may primarily focus on sex offender registries. The reason a company or organization might choose to limit the scope of what a background check includes is typically two factors: 1) cost and 2) speed. The more information included in an FCRA compliant search, the more data confirmation is needed from the background check company, which leads to higher cost and more time.  In the case of a large retail store chain that might receive hundreds of applications a day, a more streamlined (and lower cost) background check makes practical sense.  Other background checks for more sensitive areas – such as firearm sales or occupations involving caregiver work – are often much more exhaustive in terms of criminal records.

In addition to public records, some background checks may include the verification of education/certification/professional designations, work history and possibly credit history. The information typically included as part of a standard background check, such as an address history, can help corroborate a person’s work or educational history claims, but educational records themselves – including transcripts – are not public records. Consequently, a different approach from a traditional background check is required for verification.

Likewise, work experience is also not a part of public records (except for what people choose to self-publish in a LinkedIn biography/resume, which may be of dubious accuracy). In both instances, researching and acquiring this information would require, at a minimum, express permission from the individual being researched followed by phone calls, emails or potentially letters to thoroughly examine the references given. While some background check companies do offer this service, they do not have exclusive access to information that wouldn’t be available to anyone else with the appropriate written permission.

In the case of a credit check being included as part of a background check package – which may arise in the case of tenant screening or other forms of credit being extended – permission from the person being researched may be required depending on whether it is a “soft” credit check or a “hard” credit check.

A soft credit inquiry as part of a background check provides a credit score, which can provide a general sense of a person’s credit worthiness. Permission may not necessarily be required for a soft credit check.

A hard credit inquiry provides a detailed credit history information that paints the full picture of why a person has the particular credit score that they do. A hard credit inquiry can actually lower the credit score of the person being checked by several points, so permission is always required. Both the credit score and the related credit history are pulled from one or more of the three major credit bureaus – Equifax, Experian and TransUnion, which are all private for-profit companies.

Social media is increasingly being considered a useful component of a more holistic approach to background research – particularly, as it relates to pre-employment screening. While some background check companies may offer the social media analysis as part of a background check, the information provided is typically just a list of the possible social media accounts identified rather than any kind of qualitative analysis. The extent to which the information gleaned from this kind of social media background check is useful largely depends on the purpose of the background check and the value that is placed on a potentially more candid look at an individual.

As online personas can be curated or skewed in myriad ways, most background check companies stick with the basic facts only rather than making any judgment calls though some may offer. Calls for the regulation or outright banning of social media screening as part of a background check for hiring or other FCRA regulated purposes has been building momentum and may ultimately limit the use of this tool.

General media reports, such as those found in online based newspaper articles, press releases and videos, that reference a subject of a background check may also sometimes be included as part of a background check (though comparable results can also be gained by simply using a standard search engine).

A background check conducted by a private investigator or lawyer may also reveal some non-public data, but they are unlikely to disclose this information unless there is a legally permissible reason for them to do so.

How much do background checks cost?

The cost of a background check can vary greatly depending on the information included in the background check (which is often related to the purpose of the background check), the volume of the checks being conducted (as higher volume typically results in a lower cost per search) and the source of the background checks. Here are just a few potential scenarios:

Charitable organizations running a relatively simple yes/no volunteer criminal background check may pay as little as $5-$10 per search (which are typically passed on to the prospective volunteers).

Online public records background checks can range from $9.95 to $29.95 (though many include unlimited searches for that cost for a given period of time).

An FCRA certified pre-employment or tenancy background check typically ranges from $15 to $50. Some businesses and real estate companies pass some or all the cost of the background check onto the applicant in states where it is legal to do so. Ostensibly, this is used to weed out less serious applicants, but – in some instances – it may be a secondary source of income for the company.

Background checks generated by a lawyer or private investigator will typically cost from $75 – $250 depending on the firm used. Most lawyers and PI’s pay a yearly subscription for unlimited searches or a wholesale pay-per-search price for professional services that automatically generates a customized report. The cost involved is more a function of the lawyer or private investigator’s time than it is the cost of the information.

What are the limitations of background checks?

While background checks can provide a great deal of useful information that might not otherwise be previously known or disclosed by the person being searched, there are limitations with even the most detailed background checks.

Many web based people-search companies that provide instant background checks also provide an opt-out option for those who want their information removed from the record database, which may mean that the data for certain individuals may not be available. Online based background checks may also supplement their data with “self-reported information” (i.e. personal information a person has reported about themselves, such as a date of birth, address and phone number) which may be inaccurate.

Official background checks performed by Credit Reporting Agencies (CRAs) may be limited by transcription errors both in their own databases and from the source records (e.g. at the County level). Incorrectly recorded names, social security numbers, driver’s license numbers, DOBs and other information may cause certain records to be excluded from an initial search if the CRA cannot definitively determine that it is related to a specific individual and – given the legal requirement for accuracy for consumer protection – the tendency would be to err on the conservative side. These limitations may also apply to a web based background check, but the ability to pull multiple background reports (i.e. with alternative name spellings) may mitigate this to a certain extent though without the guarantee of accuracy.

Even criminal background checks that include a fingerprint search may be incomplete as the FBI database relies heavily on voluntary local/state cooperation, which means that the records may not be complete or up to date. Perhaps for this reason, these fingerprint searches are not governed by the same FCRA protections that govern other official searches, so, despite the fact that you can’t fake a fingerprint, there is no guarantee that the results are complete (and no recourse for a person being searched if the results are incorrect).

Public records information in general is largely unavailable for persons under 18 years old and may be virtually non-existent until well after their 18th birthday. Similarly, people born in the US but who moved out of the country prior to their 18th birthday will likely have little or no public records trail.  Recent immigrants to the US are also unlikely to have accumulated any significant background data. Public records laws and the level/quality of record keeping are different in every country, so there is no one worldwide background check or people search service available.

The information that qualifies as public records also varies by state. While most states make criminal records committed by adults a matter of public records, the definition of criminal records varies. For example, though Florida famously (or perhaps infamously) directly publishes general details of most criminal activity in the state, they do not include driving records as part of the public record. As another example, while most states make marriage records available from a county recorder as part of the public record, California offers a confidential marriage license option that, if chosen by the marrying couple, prevents anyone other than the couple from obtaining copies.

Lawyers and private investigators may have access to more up-to-date information that is potentially more comprehensive as it also includes non-public information, but there are limited approved purposes for commissioning these background checks. This means that you will be required to provide proof of your approved purpose. Further, despite the access to wider information that is potentially available to a hired professional, the information they are legally permitted to release is limited – often only allowing for contact information to be passed along to concerned parties. The cost of hiring a professional may also be prohibitive in many instances.

Social media searches as part of a background check are helpful to the extent that they provide an “unguarded” glimpse at a subject, but a rise in awareness of this practice has caused an increasing number of users to limit public access to their accounts or delete them entirely. Others may curate a vanilla public facing account while simultaneously using an alternative (“alt”) account that paints an entirely different picture. Most social media-based background checks perform their searches based on a name and verified email addresses – both of which can be easily substituted in the creation of a social media account.  In addition to the larger well known social media networks/apps, such as Facebook, Twitter, Instagram and Snapchat, there are hundreds of smaller more specialized social networks and web communities that may provide useful insights, but are not included within the scope of a commercial background check.  And, of course, many people do not use social media at all.

Summary

A background check can be used for a host of different purposes and can be tailored to include anything from a red light/green light result (for a charity volunteer) to a full battery of public, professional and educational data (for a sensitive Government position). The scope of background data available and the possible limitations of that data largely depends on what you’re going to use it for. While there are limitations on background checks used for official purposes (and also require the permission of the person being searched), informational background checks can be acquired anonymously on virtually any subject by anyone.






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