CNBC Series Highlights the Importance of Background Checks

CNBC Make It, an affiliate of CNBC that focuses on topics concerning money, saving, and entrepreneurship, recently launched a new article series called HR Confidential. The series sees anonymous HR professionals contributing guest blogs about their battle stories from years in the field. Recently, the series featured an article titled, “I hired him without performing a background check. Then he stole his colleagues’ identifies” highlighting the extreme importance of vigilant pre-employment screening policies.

The story came from a senior HR manager at a foreign banking company. The business had a messy file room filled with cluttered personnel files for more than 3,000 employees. To organize everything and clean up the mess, the HR manager hired a temp to go into the file room, clean up each personnel file, add information where necessary, and then file everything away.

Shortly thereafter, other employees at the company began approaching the HR manager about changes to their banking information. Within three weeks, there were three employees reporting banking changes due to identity theft. The HR manager realized there must be an internal issue and hired an investigative firm to find the culprit.

The temp, it turned out, had been stealing Social Security Numbers from the files he was supposed to be organizing. Using this personal data, he applied for and received numerous credit cards. Luckily, the postmaster general noted the suspicious  behavior  and flagged the man’s address. This factor made it easier for the investigative firm to identify the person who was stealing identities in the company.

The HR professional pointed to two main lessons from this story. The first was companies should know their limits and be aware of what they can’t handle—such as launching internal investigations to find data leaks or catch thieves. The second was background checks are always essential, no matter the employee.

Many businesses don’t conduct background checks on every person they hire. Full-time workers usually get the full background check treatment. However, in lots of cases, employers are more lenient when it comes to hiring part-time workers, seasonal workerscontractors and vendors, or temporary workers. With temps, the assumption is often that the temp agency conducted a background check and wouldn’t send a worker who wasn’t thoroughly screened.

The important thing to remember is even temps or part-timers are representatives of your business and brand. They are affiliated with you and can damage your image. They can also do things your business might be held liable for later, especially if you fail to do your due diligence by conducting a background check. In the HR Confidential story, any of the identity theft victims could have sued their employer for negligence. Luckily for the business, none of them did, but the employer didn’t avoid costs or consequences.

The business spent $5,000 on the investigation and paid an undisclosed sum to cover the service fees the victims had to pay to get their records in order. While there isn’t any guarantee a background check would have stopped the theft from happening, there also isn’t any guarantee it wouldn’t have. A thorough check could have spotted red flags in the form of criminal convictionsarrest warrantsunexplained aliasesdodgy finances, or negative employer references.

Bottom line: run the background check. Paying for a background search that turns up nothing is always better than the alternative.



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Michael Klazema

About Michael Klazema The author

Michael Klazema is the lead author and editor for Dallas-based with a focus on human resource and employment screening developments

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