$40 background checks
Tuesday, March 16, 2004 at 06:59PM $40 background checks
New software lets users run $40 "background checks"
http://www.usatoday.com/tech/news/internetprivacy/2004-03-08-background_x.htm
By Adam Geller, Associated Press
NEW YORK ? With security-conscious employers stepping up scrutiny of job candidates, background checks have become standard procedure at many companies. But the new check-in-a-box, which is marketed by ChoicePoint and began selling alongside software for $39.77 late last year, points to new efforts by data vendors to market background screening as a consumer product.
Beyond the gallon jars of mayonnaise and the office furniture, shoppers browsing the aisles at some Sam's Club stores will find something that isn't usually sold at retail ? an employee background check in a box.
"Make better hiring decisions," says the package, a little smaller than a box of breakfast cereal. "Conduct background checks quickly and easily!"
ChoicePoint ? with nearly $800 million in annual revenues, one of the nation's largest vendors of personal, financial and legal data ? also recently began selling background checks via Yahoo's HotJobs.com online employment board, offering jobseekers the chance to vet themselves. Entersect, owned by competing data provider LocatePlus Holdings Inc., says it plans to launch a self-check service later this year on CareerBuilder.com.
The companies say such checks give workers the chance to spot and correct problems in their personal records before an employer does, and to affix a seal of approval to their resumes.
"They're striking out in creative new ways to try to come up with new ways to applying their product and generating revenue," said Bruce Simpson, an analyst with William Blair & Co.
The retail marketing of background checks is comparable to Fair, Isaac & Co.'s decision three years ago to begin selling credit rating scores ? previously available only to banks and others in the know ? to consumers who want to check themselves, said Andrew Jeffrey, an analyst with Needham & Co.
The new check-in-a-box, containing a CD-ROM that allows users to tap ChoicePoint's online databases, gives small business owners access to an essential tool previously available mostly to big companies, say ChoicePoint and Wal-Mart, which is selling the product in 41 of its Sam's Club membership warehouses in 26 cities.
In a survey of personnel executives released in January, about 80% said their firms now conduct criminal background checks on job candidates, up from 51% in 1996.
But smaller businesses are still somewhat behind the curve, with 69% saying they now do such checks, up from 43% in the previous survey. The surveys by the Society for Human Resource Management were similar, but not identical.
The Sam's Club product is part of ChoicePoint's efforts to broaden its reach to employers and other users that previously may not have done such checks, said James Lee, the company's chief marketing officer.
"It's less about making it (the background check) a consumer product and more about making information tools available to consumers, but under some very strict privacy guidelines," Lee said.
Privacy advocates object, cautioning that selling background checks over-the-counter could put personal information in the wrong hands.
"When you mass market background checks like this to anyone who has $40, I think it's dangerous," said Pam Dixon, a researcher formerly with the University of Denver's Privacy Foundation who now heads her own group, the World Privacy Forum.
Some private investigators are critical, too, saying the check could undermine their own businesses. They also complain that ChoicePoint's requirement that users have a business license is an inadequate control on information that should be parceled out much more carefully.
"There are tons of people who have a business license who don't have a business," said Chris Appleby, a Marietta, Ga., investigator who is president of the Georgia Association of Professional Private Investigators.
"If Joe's Bait Shop ... goes out and buys this thing with a business license and then he wants to find out information about a neighbor, then he would be able to essentially do that," Appleby said.
ChoicePoint, though, says it has built strong safeguards into its system to avoid privacy breaches. But they are not absolute.
For starters, there's the sticker that seals the top of the box. "Business License Required," it reads.
In practice, however, a purchaser can use most of the screening options ? including criminal background checks, Social Security number identification and vetting of credentials ? without supplying such a license, ChoicePoint acknowledges.
Users of those services are checked "on a random audit basis, but there is not an affirmative requirement that you have to produce it (the license) before going forward," Lee said.
He noted that data provided by such checks is public information, available at courthouses or other government offices, for those who know where to look. In addition, other safeguards are built into the system ? notably, one requiring that a user supply the Social Security number and name of the person they are checking.
Users also are required to follow federal law, mandating that they have the signed permission of job applicants before running a screen. But satisfying the software requires only clicking on a box ? ChoicePoint does not require that the form be presented or check to see if it has been signed.
ChoicePoint imposes stiffer requirements on users who want to search motor vehicle records and personal credit reports. Users are required to fill out and fax in a number of forms. The forms ask for fairly limited information, but ChoicePoint says each application will be hand-vetted by a company employee, who will call the applicant and verify that they have a business license.
That process usually takes 24 to 48 hours, Lee said, after which a user should receive an e-mail approving or denying access.
ChoicePoint, whose customers including the federal government and numerous large employers, also supplies information to journalists, including those at The Associated Press.
Searching background information with the new check is pay-as-you-go. Buying the ChoicePoint product requires having a $30 membership at Sam's Club, as well as shipping costs if ordered online. It comes with $50 credit for searches ? enough to run a national criminal check, identity verification, and employment verification on one person, as well as a drug test.
Additional checks cost from $3 to verify a Social Security number to $9 for a credit report to $25 for a national criminal screening.
ChoicePoint says the product is still being tested in limited Sam's Clubs stores, but that it is doing well and that the company is speaking with other retailer about offering similar products.
Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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