Due Diligence When Hiring a Background Screening Organization
1.) Online Presence and Branding
First impressions are everything, especially when selecting vendors for hire. There are many different matters to consider when engaging a background screening organization to provide vital information such as employment background checks. The employment background check industry is relatively new and it contains thousands of organizations providing screening reports to employers.
Reputable organizations should have an online presence to show they are capable of providing compliant screening services to end users. This is achieved first by determining the quality of their organization’s website. It is crucial to verify if a website exists and if it does, whether or not it is up-to-date with current information or news.
A competent background screening organization’s website should provide a clear and concise snapshot that addresses the following:
- Specifically where the organization is located
- Searches provided and a brief description about each
- Compliance with any state/federal regulation(s)
- Data Security Plan indicating how personal identifiable information is handled
2.) Member of Any Industry Trade Association
The only trade association dedicated to the background screening industry is the National Association of Professional Background Screeners (NAPBS). The organization strives to “represent the interest of companies offering employment and tenant background screening services.” NAPBS currently represents over 900 member organizations catering to employers in every state, from Fortune 500 organizations to small businesses.
Currently only 100 background screening organizations are accredited by NAPBS as of May 2018. Organizations may achieve NAPBS accreditation through the Background Screening Credentialing Council (BSCC). Employers Choice Screening is proud to announce that they have been accredited since June 2017.
A standard was developed for background screening organizations to conform to in order to receive accreditation:
- Information Security
- Legal and Compliance
- Client Education
- Researcher and Data Standards
- Verification Services Standards
3.) Compliant Disclosures and Notices
One of the main compliance pieces that employers fall short in due to an incompetent background screening organization is the applicant disclosure/authorization and federal/state notices. It is required when engaging a background screening organization for them to complete a disclosure form before procuring a background check. The background screening organizations must adhere to new federal laws stating that the disclosure must be on a separate page from the authorization.
First and foremost, the location and contact information of the background screening organization procuring the report must reside on the disclosure as well. In addition to this, state-specific notice must be provided if the subject of the report resides or is working in a state with such consumer protection laws. A reputable background screening organization should be aware of such notices and provide them to their end users.
4.) One-sided End User Agreements
As a part of the account set-up process, employers must be provided with an end user client service agreement when engaging a background screening organization. This agreement explains that background checks will be provided for employment purposes, comply with any state and/or federal compliance laws, and protect both employers and background screening organization in the event either one is found negligent for violating the agreement.
Employers must place close attention to the end user agreement as a majority of background screening organizations will try to include a “release of liability” clause protecting them from any litigation arising from the quality of the service being provided.
Employers must steer clear of agreements that include any language resulting in the release of any liability. Instead, there should be a mutual indemnification clause that would protect either party in the event the other is held liable for negligence or intentional wrongdoing.
5.) Educating/Informing Clients
Since the background screening industry is always changing and very fluid, background screening organizations have a duty to keep their clients aware and compliant with current background screening laws. One way this can be achieved is by a monthly newsletter or email legal alerts. If a background screening organization is not informing their clients of new laws, they are indicating that they do not understand the industry they are representing.
Onboarding a new client is the perfect opportunity for a background screening organization to provide value added education that the employer can use to stay in compliance.
Employers Choice Screening provides an online (roughly 30 minutes in length) course explaining the Fair Credit Reporting Act (FCRA) and the importance of complying with regulations set forth in the FCRA. The employer takes a test at the end of the course to validate competence.
6.) Business/Quality Certifications
In additional to industry accreditation, employers must also review for quality certifications that the background screening organization has acquired, placing an emphasis and microscope over the entire background screening program. These quality certifications demonstrate the importance that the background screening organization has taken in the quality, on-time delivery, and high level customer satisfaction for their clients. An example of this would be the ISO 9001:2015 quality management system certification that Employers Choice Screening is currently in the process of acquiring.
A quality management system should address the following:
- Demonstrates its ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements
- Aims to enhance customer satisfaction through the effective application of the system, including processes for improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements
- All the requirements of ISO 9001:2015 are generic and intended to be applicable to any organization, regardless of its type or size, or the products and services it provides.
7.) Past Performance
Background screening organizations should provide proof that they have provided services similar to the one being requested by the employer. This can be achieved by simply asking for client references. Another way to verify legitimacy before engaging a background screening organization is through requesting a copy of their capability statement, which serves a purpose similar to an organization’s resume.
Information this capability statement documents includes the following:
- Core Competencies
- What does the organization excel in specifically? What is their core business?
- Past Performance
- Who has the organization successfully provided similar services for?
- What sets the organization apart from other competitors? What value can they bring to the organization?