Are High-Security Checks Worth It?

by Florian Tanant
Background checks are a cornerstone of the modern job application process. And yet, the tools used to vet identities are still surprisingly archaic, especially when it comes to dealing with fully remote applicants. Here’s how you can deploy modern background checks to ensure you do not onboard fraudulent employees.
A background check is a process designed to confirm someone’s identity and to ensure they are trustworthy. This trustworthiness can be measured based on the individual’s history of fraud, delinquency, criminal behavior, or even credit score.
Background checks may look at the following areas:
There is no strict definition of what constitutes a background check. However, some companies may be required to perform due diligence for specific areas (for instance, they may need to check new starters’ criminal records when they hire staff in educational settings).
While background checks can be run for firearm purchases or property rental agreements, by far the most common reason is to screen potential hires.
Finally, note that background checks are increasingly regulated by government bodies, notably to avoid discrimination or to ensure data protection. In the US, for instance, the Fair Credit Reporting Act from the Federal Trade Commission defines which consumer reports can be collected as part of a background check.
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A report by the American Institute of Certified Fraud Examiners claims that employers lose approximately 5% of their gross revenue to fraud. This amounts to $6.3 billion in total losses worldwide, with a median loss per case of $150,000.
In theory, background checks could help alleviate these losses by allowing companies to flag untrustworthy individuals before it is too late. The goal would be to curb embezzlement, data leaks, and even money laundering.
In some cases, employers have also been duped by identity thieves. This is especially prevalent following the rise of remote jobs, where unscrupulous candidates can easily forge documents to pass a job interview.
While this scenario does not necessarily make you, as the employer, an accomplice to fraud, you have to consider the risks of hiring someone without proper due diligence.
While background checks are common practice, they’re not always effective. Here are a few reasons why:
In many ways, background checks are closely related to KYC verification. The key difference is that the former is used to verify candidates’ identities, while the latter is deployed for customers and clients.
Nevertheless, there is an overlap in the kind of tools you can rely on to verify identities – especially if you want to do it automatically and at scale. Here are examples of what you could leverage today:
SEON’s panoply of anti-fraud tools is designed to give you more information about online strangers. You can learn how they connect online (including what kind of device they use), and SEON’s email address and phone number lookups can point to the person’s true online footprint, including social media accounts and previous activity.
The goal is twofold. Firstly, to help you profile people as quickly as possible, based on as little information as possible, without any friction. Secondly, it lets you instantly raise red flags when data appears suspicious.
For instance:
All these questions are increasingly important for companies who need to perform background checks to catch fraud as early as possible. Ready to learn more about how it could work for your business? Get in touch with SEON today.
Background checks tend to cost between $20 to $30. You may find more affordable prices depending on volume and thoroughness.
A background check tends to return results relating to criminal records and past employment. More thorough checks will also look at financial history and even social activity.
Felony or even misdemeanor criminal convictions on your criminal record could be a red flag for employers or real estate agents. For online applicants, a suspicious connection via VPN or Tor could also signal that you are a fraudster.
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Communication Specialist | Florian helps tech startups and global leaders organise their thoughts, find their voices, and connect with customers worldwide.
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