Why Background Checks are Critical

In today’s economy it’s more important than ever to take steps to protect ourselves. As our social and business infrastructure gets weighted down with more and more complexity and bureaucracy, we find ourselves focusing more on dealing with those issues than ensuring the very people we look to engage in business with are viable and solid individuals.

This posting was written to share some important and recommended methods of protecting yourself as it relates to determining if somebody is the right person to work with. It’s critical to not make excuses or be lazy in this area. Create a standard of care which is always followed as it involves your business and personal life; a standard which helps protect you, the people you work for, who work for you, and your family.

I cannot stress how important it is to run background checks on every key person you consider entering into a business or contractual relationship with. And I’m not talking about after the fact; you do this before you enter into any business agreement with them. Background checks should be the bread and butter of any entrepreneur or business owner who is securing investment or looking to hire key members for a company. But this isn’t just restricted to key members either; many companies have mandatory background checks for anyone they consider. This approach has proven to be highly effective in following a standard of care as it relates to screening everyone, regardless of position.

I once asked a Private Investigator with more than 30 years of experience what the number one mistake they saw their clients make. The reply: “Coming to me after the fact.”

Background Check Types

There are different types of “background checks” as some involve little to no actual investigation work, and others require a large amount. For example, there’s a big difference between a general background check which pulls all public records, and a detailed background investigation which produces records which are certified by the PI and admissible in court. The good news is the basic record check is usually enough to get you what you need, and it’s also the least expensive. Private Investigators (PIs) have access to database systems the public does not, so while you can pull records yourself, it’s been my experience you’re better off working with a talented and capable PI. Additionally, it’s been my experience the PI’s record systems are far more accurate for matching names, addresses and social security numbers, and produce more accurate results.

The price for background checks/investigations can vary as there is no standard cost. More detailed records, such as actual copies of police reports, court records and so-on can take much more time, resulting in costs spanning hundreds and even thousands – but rarely is such a detailed investigation necessary unless one is preparing for court. The good news is basic records are very cost effective and will usually provide you with enough to know whether or not you want to engage in any sort of relationship with the individual in question.

Be aware that pre-employment background checks must follow FCRA rules and regulations. Legitimate private investigators are aware of the laws regarding pre-employment background checks.

How to find a certified Private Investigator

While most PIs are solid and deliver good services, like any other industry, there are bad ones out there.

The best recommendation is always a referral. If you know somebody who can vouch for a PI, it’s probably best to go that route. However, if you don’t have any contacts that can provide a referral, you can use the NALI (the National Association of Legal Investigators) site (http://www.nalionline.org/) to find a local PI, or any of these additional legitimate investigative websites: http://www.usapi.org/ , http://www.intellenetwork.org/, and  http://www.nciss.org/.

You can also look into your state’s P.I. Association: http://www.crimetime.com/licensing.htm

Hiring a PI

Always enter into a written agreement with the investigator to protect yourself and to ensure each party understands the assignment. While a retainer is standard in the industry, you should not pay the full bill in advance as like lawyers, investigators don’t always know how much time a case will take nor do they know their out-of-pocket costs.  Never pay cash up front. Always use a credit card so if things go bad, you can challenge the payment through your bank.

Things to be wary of:

  1. They ask for an exorbitant fee up front.
  2. They ask for cash up front.
  3. They represent “special database” systems they claim they can’t tell you about.
  4. They are unreliable and don’t get back to you when they say they will.
  5. They claim they can provide private bank account information on somebody (see below).

Trust your gut. If you don’t feel comfortable with the PI, don’t use them. Never secure a PI out of desperation.

One common question is “Can a PI get somebody’s bank account information?” Well, yes. Some can because of their connections. But it doesn’t mean that it’s legal, and if the work ends up being necessary for any court case, how will the evidence be explained if it was obtained illegally? Remember, no PI can legally access a person’s bank account without their written consent, a judgment entered in court,  or without being provided the materials by a legitimate third party.

I cannot stress the value of a solid PI. They are worth their weight in gold, and if you find one, you will have a great resource to share with friends and family.

Reading the Results

A good PI will provide their personal opinion on the results of any information they find. If they have extensive experience, their opinion counts for a lot. If they say “you do NOT want to do business with this person” it’s probably good advice you should follow.

Here are some very common things that show up on background checks which are red flags:

  1. Felonies speak for themselves. While some people are wrongly convicted, most are not.
  2. While they do not carry the same weight as Felonies, one must pay attention to Misdemeanors as they can encapsulate everything from fraud to assault.
  3. Be concerned if somebody has numerous addresses. While moving on a regular basis isn’t a bad thing in itself, people who engage in fraud and other nefarious actions usually have a history involving numerous addresses.
  4. Be cautious if somebody has affiliations with numerous businesses because they may be using them as shell companies.  While this may not always be true of well-known entrepreneurs, your average person doesn’t create and dissolve companies routinely.
  5. Tax liens can also show in reports. Rule of thumb – people with money do not get tax liens on their property.
  6. DUIs and revoked or suspended driver’s licenses.  This may indicate a problem you do not want to deal with.
  7. Civil Lawsuits can also be very important and can show a pattern of behavior. The only way to see if a civil lawsuit has any merit (and if it should carry weight relative to the individual you are reviewing) is to review the civil case directly. This means pulling the case filings (complaints, motions, responses, replies, etc.) from the docket of the court (state, federal, etc) and reviewing them in detail. While obtaining these documents does cost money (you cannot get these records for free, even though they are considered “public records”), it can reveal detailed information that could be critically important.

Also know people can seal their own court records to prevent the public from gaining access. This is a catch 22. It both allows the innocent to protect themselves and the guilty to hide facts from prying eyes.

Acquiring Court Records

PIs have access to online court records with the few clicks of a button that you do not, so if you need something in a hurry, it’s best to go through a PI. However, if you do not need the records in a hurry, you will always save money by acquiring the records yourself. Depending on the state and county, acquisition of the records could be as simple as a few keystrokes and charging your credit card a menial amount while others may require you to mail a check and wait 10 days for a mailed copy of the records. While online records will usually tell you enough about the basics of a case (e.g. if the person has judgments against them, etc), the online records will rarely tell you (for example) the details of the case, and often its the details that are the most telling. This is why acquiring the actual records and reviewing them can be critical.


Squatting is a very common activity by con men and fraudsters. You must watch out for this in the background check. If it’s just a one-time event and they can explain how the landlord was in the wrong (and it can happen) it may be OK to overlook it. However if there are multiple squatting references, it’s a red flag. How do you spot squatting? Look for numerous addresses paired with multiple Unlawful Detainers.

Good liars have an explanation for everything!

A good liar can explain every single negative thing which comes back on a background check. A con man is even smoother, and they can do it in a fashion that brings comfort to most people as they always have a good story or excuse which usually encapsulates:

  1. Why it wasn’t their fault; or
  2. Why they didn’t do it; or
  3. How they were a victim, only protecting themselves (and/or their family); or
  4. How the information is incorrect; or
  5. How they did it but learned their lesson.

It’s very important to exercise proper judgment. If the background check has only one entry on it for only one concern and there isn’t a history tying into other things, there’s a good chance it was a fluke and their explanation may be true. People make mistakes or can be incorrectly accused. That’s part of life. Don’t be too harsh on people for simple mistakes, but remember, the best representation of bad behavior is that behavior repeated. It’s my experience if a background check shows repeated bad behavior it’s an automatic red flag which no story can cover. One can read this and say “of course, everyone knows that” but too many people are given excuses they buy into which cause them to abandon their judgment in this area. Don’t buy into the story. Buy into the explanations backed by documented or proven facts.

Verifying Government Security Clearance

There are people who claim to have government security clearance who do not. This is a big concern since such clearance represents that the person has passed a “higher standard” background investigation and established a certain level of trust with the government, which is why people make such false claims (to use that misrepresented trust as part of their ruse). Sadly, liars will make claims in this area to gain the confidence of others hoping that a check for validity is never done. The good news is it’s very easy to verify if their claims are true or not. All you need to do is contact the Defense Security Service (www.dss.mil). To begin the process, send an Email to occ.cust.serv@dss.mil and inform them you wish to find out if somebody has the security clearance they claim. You should receive a response very quickly. When you do, provide the full name, address, DOB, and if possible, the SSN of the individual you wish them to investigate. They will let you know if they have enough information to provide accurate results. There’s no reason to pay a PI to conduct this check, it’s easy to do yourself.

Determining somebody’s Viability

While background checks are essential, there are some general methods of communication which can give away somebody’s viability and sincerity. While there are entire volumes written on the understanding of the psychology of people, especially as it relates to deception and misrepresentation, there are a few fundamental and basic checks one can watch for which apply to every day life.

Things people say or do which generally represent concern:

  1. Constantly dropping “big names” as friends or business contacts.
  2. Making grandiose claims of financial or other prowess.
  3. Using something other than the information itself to make a representation of fact for the information.
  4. Ignoring questionable or bad behavior.
  5. Constant story telling.

Red flag things people say or do which should be very alarming:

  1. Referring to you as their “good friend” (especially to others) when you hardly know them.
  2. Making statements like they trust you with their life, etc. when they are not a lifelong/true/best/trusted friend.
  3. Making excuses and failing to provide any form of evidence supporting important claims.
  4. They get hostile, overly defensive, or change the subject when you question their representations.
  5. They must control everything and will not meet your requests; this includes meetings, meeting times, phone calls, discussions, negotiations, etc.

Always trust your gut, and remember: those who stand for nothing are capable of doing anything.


Work smarter, not harder. In order to survive in today’s society and economy, this mantra is critical. Now, more than ever, choosing the right people to work with is critically important. Human beings can be amazing or devious creatures. One person can commit to the highest loyalty of honor and integrity, and another can lie to your face, steal your property, and try to destroy your life through a variety of means, all because it feeds some sickness which you will never understand. However in order to do this (most of the time), some sort of connection must be made where you invite this person into your life or business, and most people who encounter such issues look back and find if they had conducted some form of investigation on a person who engaged in wrongdoing against them prior to working with them, everything would have been different.

Always conduct background investigations on those who you look to pursue relationships of trust with. Such a habit will always help serve and protect you in the end.