Follow Up On Credit Background Checks

Fri, March 12th, 2010 - 5:14 am - By Gordon Basichis

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There is an ongoing controversy in several states about whether or not employers should run credit reports s part of the background checks they use in their preemployment screening programs.   I have posted some thoughts on this subject in a recent blog,  Controversy Over Credit Reports as Background Checks.

Some critics of the credit report as a background check contest that this is a draconian practice, as it inhibits many skilled and otherwise qualified employment candidates from finding jobs.  They contest that in this economic downturn where the job market is tight as it is, it is one more obstacle to finding employment they will often fail to hurdle.  They claim that job applicants are being penalized unnecessarily for personal misfortune in a  bad economy.     Some contest the practice of conducting practices is illegal, while others claim there is no evidence that discloses those with poor credit are a greater risk to embezzle or to commit some other form of office theft.

These are all valid points.   As one of my own recent critics contested, I am obviously advocating credit reports because Corra Group is just in it for the money.  Well, yes, but more significantly, we are determined to furnish the services requested from current and future clients.  These are employers.  Many have been in business for quite some time.  There is really no need to “sell,” them them employment credit reports as the great majority make the request of their own volition.   We will supply them with employment credit reports.

I admit there are no studies performed on the relation between credit reports and avoiding employee theft.   The evidence is empirical, meaning this is what employers have been telling us and other background searching agencies for quite some time.   This has been their standard practice for decades in some places.   Again,  we don’t need to sell this to them,  although we admittedly promote all of our products and services.   We are not shy about our marketing efforts or what we provide.

All this being said, I wanted to pass on to all potential employers and critics of this process comments that have arise unprompted from  two clients, recently.   Both claimed they have hired people, thinking they were good candidates.  Neither client ran credit reports as part of their preemployment screening.   Both regretted that choice.  One cited potential theft, or more to the point, actual theft on the part of one employee with substance abuse habits and lousy credit.  He was to discover this later.  Both clients cited the time and effort they had to spend answering phone calls form creditors for their bad credit employees.  They complained of the paperwork involved with dealing with wage garnishments and responded to letter from creditors.   Took up their time, cost them manpower and extra money. They were not happy.

So no matter which way you come down on the argument about employment credit reports, if you believe the other side lacks valid points then you are sadly mistaken.   As an job candidate, you may feel slighted for being penalized for having bad credit.   As an employer, you may well believe you are in your rights to conduct credit checks on all potential hires.

Like most things in life, we would like to see it in simple terms.  It’s not.   And that is the only thing that is clear about the matter.

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