Background and Credit Checks are a Goldmine of Information 

By Cindy Schroeter Graham

In this day and age it may be prudent to glean whatever information we can about a potential employee or business partner. Credit checks and background checks can provide a wealth of information, from how a person handles their finances to criminal records. How this information is used and secured by a company could determine whether the company is compliant with privacy policies and secure information handling.

The person conducting or reviewing a background check has access to information that could be devastating if it ended up in the wrong hands. If the information is lost, stolen or otherwise determined to be used for identity theft or fraud, it could result in fines up to $2500, according to the FACT Act.

It is practical to consider implementing secure information handling procedures when personal information is obtained, handled and stored.   Here are some suggested guidelines to ensure the privacy of information obtained from or for employees and applicants.

• Designate who will have access to employee information. This applies to information gathered prior to and following background checks. Will a background check be conducted on all applicants? If not, make it a practice not to collect a social security number until you have determined whether the applicant qualifies for the position in all other aspects.

• Procedures for securing information. Once the information is obtained, implement safe handling procedures. Determine how long the information will be left unsecured and where the information will be kept secure. Information left unattended on a desk should be an unacceptable practice.

• Procedures for accessing the information. Determine who will have access to the information files. Consider a log for recording when the files are accessed, by whom and why. If your company maintains a large volume of employee files, consider a dual control access system, which provides accountability and monitors the person gaining access to the information.

• Procedures for destroying information. Information that is no longer needed should be properly destroyed as stated in the FACT Act. Proper destruction goes beyond putting the document through a shredder. It includes where the document is kept prior to being shredded. Is it kept in  a box under someone’s desk? Or is it in a locked bin or locked storage room.

Background checks come in a variety of details as well as cost, from basic credit checks to full comprehensive searches. The duties of the employee and the type of information he/she will be handling may help determine what type of background check is sufficient.

Ask a few questions to start with.

• Why do you need or want a background check?

• What type of information are you looking for?

• Will the information determine whether or not the employee is hired?

• Will the information determine what job functions the employee will have?

• What details within a report will determine a positive or negative review?

Here is a non-comprehensive list of the information available through background checks which range from about $10 to $125.

• Criminal background check

• Credit Bureau reports

• Asset search

• Business records

• Marriage and divorce records

• Media searches

• Licenses

• State and federal court records

• Law suits

• Address and phone history

• Bankruptcy

• Liens

• Property values

• Aliases

• Roommates and relatives

As you can see, the information available can be very personal. It is vital that this information be kept as secure as possible. Unless you plan on running a check on every potential employee you should not collect personal information, such as a Social Security number, driver’s license number or birth date, from every job applicant. Privacy policies should be implemented to safeguard any personal information on file, whether a new applicant or current employee.

Only after you have decided the employee meets all other qualifications should you ask for a Social Security number to run a background check. To help determine which potential employees will require a background check consider the following questions.

• What type of information will the employee be handling?

• Will the employee handle personal information?

• Will the employee be handling money?

• Will the employee be accountable for time accessing personal information?

If the employee will not be handling any sort of secure information or money, consider doing a basic background check to determine the reliability of the candidate. An address and phone history may be sufficient to determine whether the employee will stay around or not. Don’t base your decision solely on the contents of these reports. Unforeseen calamities can befall us all. Interview the candidate to further explain any questions or concerns you have. The candidate may have had problems in the past and has been working hard to correct them.

 If the employee will handle money or private information of any sort, consider more extensive background checks. The more valuable the company information, the more critical the loss to the company could be. Personal information should be considered as valuable as cash. If you wouldn’t want your cash, or daily deposit, lying out or kept in an unsecured area then don’t allow sensitive employee or business information to be left unsecured either.

The trustworthiness of the employee should be considered if he/she will be handling private information. Reviewing background checks for criminal activity, moving from place to place or the inability to handle their own finances, could lead to temptations to misuse company funds or information.

Crooks have been known to lure employees into selling vital personal information. Employees may reason that they are not really doing anything wrong with the information, but the end results prove differently.

Trustworthy employees and strict privacy policies and secure information handling procedures are necessary to help fight the battle against identity theft, fraud and misuse of information.

Read other articles and learn more about Cindy Schroeter Graham.