Not All Background Checks are Equal

Not All Background Checks Are Equal

by Joanne Parrent

Why Bother with Background Checks?

It's a well-known fact among background investigators that one-third (1/3) of all employment application forms contain outright lies about experience, education or ability to perform the job. Litigators and legal investigators also know that witnesses and plaintiffs in lawsuits often lie on the questionnaires and forms they fill out. In a recent large toxic tort case our firm handled, for example, we identified lies by plaintiffs - some minor, some significant - on one-half (1/2) of the questionnaire forms they filled out.

Is this tendency to lie prevalent only among lower level employees or low-income plaintiffs with lottery mentalities? Not at all. High profile people and CEOs also routinely lie or "fudge" information on applications and questionnaires. The former CEO of Sunbeam did not list two past employers on his resume - employers who had fired him! When subjected to greater scrutiny, the bios of both the deposed CEO of ImClone and the former Chairman of Smith & Wesson were found to have had numerous inaccuracies and omissions. The recent manager of the Arizona Diamondbacks baseball team was fired after only four days on the job because he allegedly misled his employer with an incomplete resume. According to the team, the manager had omitted from his employment interviews a misdemeanor, a DUI and a history of financial problems. Similar lies - both those of omission and of commission, such as listing bogus degrees from diploma mills - have cost many business executives their jobs. We can only imagine the number out there who have not been caught because they were never investigated properly.

Thorough background checks by experienced, licensed private investigators can prevent the hiring of incompetent and/or "ethically challenged" employees. This relatively inexpensive tool can help companies find winners, rather than set themselves up for losses and potential scandals. In the same way, professional background investigations of potential witnesses and plaintiffs by both plaintiff and defense attorneys can build stronger winning cases, encourage better settlements and prevent blindsiding in the courtroom.

But maybe you are already convinced of the value of background checks. You may feel that it's good business and / or good lawyering to do background investigations. You may not dispute the argument that background checks are an element of due diligence that can provide you with information that could potentially change the course of your deal or the outcome of your case. But, are you getting quality background investigations - ones that will really make a difference?

Before you hire a firm to do a "bargain" background check, you should know exactly what you will get for the price. Many firms simply run quick and dirty searches on a few databases that take only a few minutes or hours, and the results may not include the critical piece of information you really need, the important fact that might save you from a bad deal or help you win your case. With the proliferation of internet databases today such as Westlaw and Lexis-Nexis, it might also be tempting to ask an assistant or paralegal in your office to "run a quick check" rather than spend the money on a full background investigation from an experienced, licensed investigator. Again, it is what your paralegal or assistant doesn't find that may be the information you really need, and the few dollars you save may cost you big bucks in the long run.

To get the most out of a background investigation, you should first know what the database companies can provide and what they can't.

What Will Proprietary Databases Tell You?

Databases are great starting points for background investigations, although they definitely have limitations. With some basic information on the subject being investigated such as name and social security number or even name, address and birth date, checking a number of databases will allow an investigator to:

verify the social security number and birth date
check the address and previous addresses
find aliases the subject may have used
pull up case numbers of federal and state civil lawsuits
identify tax liens, judgments and bankruptcies
check real property holdings
check UCC filings
check for professional licenses
find fictitious business names and/or corporate affiliations
find criminal records in some jurisdictions
find DMV records in some jurisdictions
discover whether or not the subject has had a case in U.S. Tax Court
find out if the subject has ever been on the federal government's "Excluded Party List" (people the Fed's don't want to do business with)
do a newspaper/media search on the subject.

What Databases Won't Tell You

Although the above list of what you can gather from online databases may sound like a lot of information, there are important limitations to database-only background checks. First of all, all databases are fallible. Perhaps the most well-known example of their fallibility came out in the aftermath of the 2000 presidential election. In 1998, the state of Florida hired DBT Online Inc., a subsidiary of ChoicePoint, to identify convicted felons so county election officials could purge them from the rolls of eligible voters. During the 2000 election vote recount in Florida, however, press investigations revealed that ChoicePoint had incorrectly named about 8,000 people as felons. The people on the list were not guilty of felonies, only misdemeanors. ChoicePoint acknowledged the error, but blamed it on the original source of the data -- the state of Texas. Although Florida election officials in a few counties discovered the errors and did not use the list, many counties simply used the database information provided by ChoicePoint and eliminated the voters from their lists. The large number of errors discovered later in various counties suggests that thousands of eligible voters may have been turned away at the polls. In one example, Salon reported that a voter named "Christine" was identified as a felon because a "Christopher" with the same last name had a conviction. In another example, an election official, Linda Howell of Madison County, found her own name on the list, and she was definitely not a felon. Given that George W. Bush's official margin of victory in Florida was 537 votes, and that most of those that DBT identified as felons were registered Democrats, a more accurate list could have affected the outcome. Whether you were happy or furious about the ultimate result, you probably don't want your own business or the case you are litigating to be subject to the same sort of incompetence.

The Florida debacle is just one example of how database information that is not double checked by a persistent, thorough investigator can simply be wrong. At Parrent Smith Investigations and Research, we never rely on one database for our searches but always check our results on at least two separate databases. Not in every instance, but enough times to know mistakes are very possible, we have found significant information on one database that did not show up on another, as well as contradictory information on the different databases, requiring further investigation to determine the actual facts.

Why Are Databases Sometimes Wrong?

Databases are fallible because they are only as good as the data they collect. For a number of reasons, important public records may be recorded incorrectly, as in the Texas example or may not be found on even the most comprehensive databases. Criminal records are often inaccurate or not available through databases. Because of state and local budget cutbacks, as well as privacy concerns, criminal records are not generally available online and must be researched on site at local criminal courts by a background investigator. Even for civil court records, which are more likely to be posted on online databases, a thorough background investigation should include court research to pull copies of any lawsuits discovered during a database investigation to first verify if, in fact, the lawsuit is the particular subject you are investigating (common names often make that difficult to determine from online records) and to discover the type of lawsuit and issues in the case, which the database file won't provide. Clearly, some types of lawsuits may be more significant than others.

In addition to criminal records, another type of legal filing - workers compensation claims - are also not generally available online and must be checked by an investigator at the state workers compensation offices. Finally, employment and education records, critical to many background investigations, particularly pre-employment screenings, are another example of information that must be gathered personally by an experienced investigator.

The bottom line is that your business decision or your case should be based on accurate and thorough information. Don't let your decisions and strategies be made the incompetent way. Don't set yourself up for scandal, trouble in the workplace or frustration in the courtroom. By using only licensed, experienced investigators who will leave no stone unturned, you can make sure you will get the facts you need.

Joanne Parrent (CA PI License #24108) is a partner at Parrent Smith Investigations.