Human Resources News & Insights

Report: Background checks keeping the wrong people out of jobs?

Background check service providers perform millions of investigations every year. But do they inadvertently disqualify innocent applicants?

That’s the conclusion of a recent BusinessWeek article, which lists some anecdotal evidence about the trouble with background checks.

One story involved a former pharmacy employee who was fired for stealing. An unemployment compensation board ruled that he was wrongly accused — but the company had already given his name to a database that tracks employee thefts.

Since then, the man has been unable to find a decent job, the story says.

Worth the risk?

Given the rising revenues for background check firms, it’s clear many companies think the risk of inaccuracy is worth it to screen out workers who might steal or harm the business in other ways. Also, statistically speaking, problems appear to be rare.

We’d like to hear from you. Do you rely on an outside firm to conduct background screens? Ever had any problems? Let us know in the comments section.

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  • Your posting makes reference to a Business Week article that is inaccurate. Background screening firms that rely on databases alone could be providing information that is inaccurate. If an end user follows proper procedure and utilizes the adverse action letter process, the candidate can correct any inaccuracies on their report. Further, if the background screening firm utilizes “contemporaneous notice”, the applicant will also be notified. (See my recent commentary on this article:

    Section 613 of the FCRA identifies two ways a CRA can report negative information. The first is to use what is called “Contemporaneous Notice”: basically notify the consumer that something negative was found on the report and to dispute it they must go back to the screening firm to correct it. Many of us, myself included, feel this is an unfair practice and in many cases will unfairly eliminate someone from consideration for a position. The second method is simple; make sure the information is accurate and reportable before reporting it to the end user. This is a practice subscribed to by most of us in the retail employment screening marketplace. We have had many National Association of Professional Background Screeners (NAPBS) discussions about this and most of us agree that this is the best practice and thus the most fair for consumers.

    What does this mean in English? When a possible criminal hit is found in the National Criminal Search, take that record and validate its existence by going to the source, the county courthouse. Once it is confirmed that its disposition is accurate and it does in fact belong to the subject you are checking, it will be reported.

    Following these steps should ensure that the company is receiving accurate information and thus the report is justified. At this point the applicant still has the ability to dispute the report with the Background Screening firm. (Instructions for consumers to do this are found at

    Now for your reference to the Business Week article. (From my blog The company [ChoicePoint] conducts 10 million background checks annually and estimates it has about 20% of the U.S. market. “The number of complaints vs. transactions is very low,” says Katherine Bryant, vice-president for consumer advocacy. The [Federal Trade Commission] has logged 695 complaints against ChoicePoint since 2005, some of which related to [a single] identity-theft episode.

    So, for those doing math at home,and if these numbers are to be trusted, there is a 0.000023 percent complaint rate over the last three years filed with the Federal Trade Commission for background checks conducted by ChoicePoint. That doesn’t strike me as a huge issue whatsoever.

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  • Name Withheld

    I was almost denied a job after I signed a consent form to run a background check on me. The report came back three pages long! I informed the rep that it was not me; I also pointed out that the name on the report was not mine. She asked me if I were using a nick-name on the application. This angered me because I consider myself a professional that would never use a nick-name on an application. I was shocked that the burden of proof was on me, as far as my innocence was concerned. She had me go to the police department and purchase a picture of the guilty party to prove it was not me. She even held the picture up next to my face after I had done everything she requested.

  • Frustrated

    I don’t worry about inaccurate info – it’s so hard to get ANY info. Reports are vague and meaningless and I feel like I’m doing them just to go thru the motions. I know they have a good purpose, but everyone is using automated replies to inquiries, or if you do get a real person, they are not allowed to do anything but confirm name, rank & serial number.

  • Mary Oxendine

    I would like to reply to the part of your article the mentions “an unemployment compensation board found the employee had been wrongfully accused”. Unemployment boards only judge whether a employee is eligible to receive unemployment compensation or not. That employee could have very well been guilty of stealing but the employer may not have presented proper evidence to the unemployment board. Don’t rely on the judgments of unemployment boards when looking at employees’ backgrounds. Use reliable sources for collecting backgrounds and as other commentors stated follow the FCRA guidelines when unfavorable information is returned to ensure that you are not eliminating a innocent person.

  • DaNeal keane

    I follow up on concerning hits for background checks prior to discussing the results with the candidate. For example, I verify highest level of education as a character check on all candidates. There have been times the information provided to the background checking company was incorrect. I have gone straight to the school at that point to verify. I have also had times when individuals flat out lied to me about their education. I understand individuals do stretch the truth in some areas of interviewing (salary and responsibilities), but this is a black and white question. I will continue to complete background checks.

  • You verify highest level of ed? How do you do that? Where are the background checks on EMPLOYERS? Job candidates need to check the COMPANY, why is this all so one-sided? Uh uh, having worked for no less than NINE companies that went out of business due to their terrible inept running of a co; make sure you check what co. you are interviewing with.

    Education is NOT a good determinant of a candidate. How ridiculous. Having enough credits to have earned a master degree, I know that college is NOT the real working world, so why does immaterial information interest you when making a hiring decision?

    I had a company hire me, run background and come the next day to say they were sorry, the first job candidate called them back and, since they offered the job to that person BEFORE ME, they were giving THEM the job (what?! remember, they had already hired me, I had already been working for them). These corporations are the ones with the highest turnover rates, by the way.
    I saw copy of the report, which was fine. What is ‘too much’ debt? Who determines this? A magic number? ALso, what makes you think that, just because it is the rule that they tell you if credit report affected their job decision, that guarnatees they will tell you? Of course not.