Businesses conduct background checks for various reasons, including making decisions around potential partners, new vendors, possible investments, or corporate transactions. It is tempting to limit these background checks to simple searches through national databases. But are these databases reliable sources of comprehensive information?
Here is a look at the pros and cons of using databases for due diligence background checks, as well as recommendations on how to craft a due diligence background check process that truly protects your business from risk.
Most companies running background checks will lean heavily on database services. You can find a wealth of database options that offer to check the information you have against records from across the country.
Database services are incredibly quick, and they are inexpensive when compared to more intensive background check methods. These databases also include an overwhelming amount of information, so you will be checking an individual against millions of records that cover a wide range.
Think of database searches as casting a wide net. You get a broad set of results and information that might be helpful, but it is likely that other important information is slipping through the cracks.
Database searches should never be your sole source of information when making important business decisions. That is because database searches have some serious deficiencies, including:
For example, imagine you are conducting a background check on someone who lives in New York City. A quick national criminal database search turns up no results. Criminal records in New York require a retrieval fee, thus they will not come up in a database and need to be searched on their own. Furthermore, some courts in the United States do not have online indices, so these counties will not be covered under a database search. Ultimately, while you think you may be getting comprehensive results from every county across the country, you are only getting data from courts that make up the database.
Cost is one of the primary reasons why companies choose databases for background checks. Database services represent one of the least expensive options — but you cannot ignore how database searches can cost you in the long run.
It takes time and labor to conduct a quality, reliable due diligence background check on an individual or an entity. A comprehensive background check pulls information from multiple sources, and then it includes verification at the primary source by experienced professionals. This verification step often means manual retrieval and an actual visit to a courthouse. Although a database service seems to be inexpensive up front, a comprehensive background will save you time and money down the road.
When you opt for the imperfect information that comes from a database search, you increase the risk to your business. As mentioned earlier, companies often perform background checks at key moments in the business lifecycle. If you fail to secure reliable information at these key moments, you could risk significant liability or damage to your company’s reputation. By investing just a little bit more in a quality, comprehensive background check, you get real value through preventing costly liability and damage.
Database searches are still valuable, but they should be used in harmony with other sources. Some background checks might start with a database search, casting a wide net that can help generate leads to follow. Or, other background checks might end with a database search, a quick look to ensure there are no other issues that need to be explored.
Many firms offer database searches as an end-product. You get the quick, cheap search, but you do not get the heavy lifting required to verify results at the primary source — often by physically visiting a courthouse or otherwise retrieving information manually. You also do not get evaluation and interpretation of the data gathered.
At CS Business Screen, we offer an alternative. Our team uses databases and proprietary tools to launch background checks. We then follow up on initial information by verifying at the primary source. Before returning information to our clients, we evaluate and interpret the data so that they have a clear, easy-to-navigate report to work form. You save time. You save money. And, most importantly, you significantly reduce risk for your company.
Contact us to learn more about quality, comprehensive background checks for your business.