Cable Installers & Criminal Backgrounds - Charter Communications hired a contractor with a manslaughter conviction and an installer with a suspended driver's license and two orders of protection in his past. Read more

Background check could have foiled embezzler - Man had three convictions when the Michigan Department of Environmental Quality put him in charge of handling payments for water permits. He later pled guilty to embezzling more than $180,000. Read more

Nursing home worker checks can be lacking - Employee screenings get renewed attention after the case of a woman sentenced to jail for stealing elderly patients’ morphine. Read more

Suspect in sex crime coached in youth event in Chesapeake - Despite a conviction four years ago and another arrest recently on charges of inappropriate conduct with a child, the 38-year-old was able to coach boys and girls at the Mayor's Cup T-Ball Classic. Read more

School hired murderer; state cancels license - The license of a private alternative school in Gresham, OR has been suspended after a teacher's aide was accused of rape and turned out to be convicted murderer. The Oregon Department of Education also has instructed the Academy of Alternatives to complete background checks on four of its staff members. Read more

Bill to track sex offenders in care homes - The Suffolk (New York) Legislature is expected to adopt a bill that will require nursing home operators to determine whether their employees, residents, volunteers and student interns are listed on the state's sex offender registry. Read more

Hill Impasse Spurs States to Tackle Illegal Immigration - State legislatures around the nation are considering hundreds of proposals dealing with illegal immigration, reflecting the exasperation of many local officials with Congress's failure to contend with the millions of undocumented workers who have entered the nation in recent years. Read more

Teen who says art teacher abused him sues board -
A Miramar teenager who told police his middle school teacher molested him is suing the Broward School Board for negligence. Read more

Food-stamp workers had criminal backgrounds - In a rush to find workers after Hurricane Wilma, Florida's Department of Children and Families hired dozens of temporary workers with criminal backgrounds to handle food-stamp applications that contained Social Security numbers and other personal information. Read more

City jailer resigns in wake of investigation - A A Zanesville, Ohio corrections officer has resigned after an internal investigation revealed he has a history of sexual harassment and lied on his job application. Read more

Knowing is half the battle, especially for new hires - Workplace assaults total 2 million each year. Employee theft costs $40 billion annually and causes 30 percent of business failures. Lawsuits for negligent hiring are on the rise and can cost a company millions. Read more

RESUMES: JUST THE FACTS, PLEASE - A report released in 2005 by InfoLink Screening Services said that 14 percent of employees lied about education on their resumes. Read more

In Wake of Student's Murder, Lawmakers Press To Allow Officers To Work as Bouncers - Read more

Senate OKs bill on ex-cons in nursing homes - The proposed law calls for nursing homes to pay for criminal background checks on all adult residents and requires registered sex offenders to be segregated in their own bedrooms. Read more

More states consider guns-at-work legislation

Security Director News, By Rhianna Daniels


ATLANTA--Legislation being proposed in Georgia and Virginia that would allow licensed gun owners to legally store weapons in vehicles parked on company property may heighten fears of increased workplace violence incidents among area security directors.

"It certainly would be another major concern to have to add to their workload," said Jack Lichtenstein, director of public policy for ASIS International. "The workplace violence issue is a very real concern of ours."

The laws would not only allow workers to keep guns in their vehicles, but would also overturn any regulations companies may have in place that do not allow weapons on property.

Oklahoma already has a similar law in place, but this legislation has met with mixed reviews. ConocoPhillips has been the most active corporation as of late in the fight against allowing guns at work in the state, going as far to seek a repeal of the law last year and boycotting guns at its offices and gas station chains in the area.

After its move, the National Rifle Association launched a boycott of the energy company.

In late February, Florida tabled a similar proposed law after it received a barrage of criticism.

Roy Bordes, president of The Bordes Group, said security directors take this type of legislation very seriously as most corporations have a policy that prohibits weapons in the workplace, as do insurance companies.

"It is against corporate policies and I don't want to say that it adds to the potential of workplace violence, but it does," he said.

Lichtenstein mentioned that the National Rifle Association is in the process of trying to have these laws passed at the state level. The NRA's argument, Lichtenstein said, is that having more employees armed would be beneficial in the event of a crisis.

"We are not an anti-Second Amendment group," he said. "Our members are largely former military and law enforcement, but we think for a number of reasons this is bad law."

There are four major areas that ASIS identified as specific problems in a position paper on the issue. Primarily, it minimizes the control property owners have as well as employer rights.

"Employers have the right and responsibility to provide a safe workplace," he said, "that is manifested in all manner of workplace policy aimed at keeping people from getting hurt and from hurting each other."

ASIS' other areas of concern include workplace violence and homeland security.

"The thought of strangers being able to drive up to a refinery, power plant or other critical infrastructure with loaded weapons in the car is beyond the pale."

Barkeeps rely on bouncers’ reps - NYPD investigators are focusing their probe into the slaying of Imette St. Guillen of Mission Hill on Darryl Littlejohn, a 41-year-old violent ex-con with a lengthy criminal record who worked as a bouncer at The Falls bar in Soho. Read more

Seeking out criminal pasts - A report last month in the Detroit News showed the result of conducting criminal background checks on 200,000 current school employees in Michigan, as mandated by a school safety law that went into effect Jan. 1. More than 4,600 of the employees had committed criminal offenses, of which 2,200 were felonies. More than 100 of the crimes were sex offenses. Among current employees, 23 were convicted of homicide, 21 of armed robbery, 11 of child abuse, 10 of escaping jail or prison and 355 of drug felonies. Read more

Oh, what a tangled résumé - People who write résumés are trying to market themselves. So like businesses advertising products, perhaps it's not surprising that they sometimes polish the truth. Companies that perform background checks on job seekers say perhaps 20 percent either make a false claim on their applications, or neglect to mention problems. Read more

Prep-school loss: Trusted friend and $1 million - Rex Stephen "Mr. Steve" Clark was like a son to William and Pouneh Alcott, someone they thought they could always count on. The relationship started when Clark enrolled his two children in the private school they founded, Lake Mary Prep. Soon, Clark was doing volunteer work. The Alcotts liked him so much, they added him to the payroll. Then they put him in charge. That's when things went terribly wrong. Authorities say he began stealing from the school, siphoning cash in small and large amounts during a 2 1/2-year period. He eventually took more than $1 million, police say. Read more

Ice cream peddlers could face checks - Mr. Softee, beware. To sell your frozen treats, you and the Good Humor Man would have to undergo a background check under a measure that passed the House on Friday. Also under the dessert bill, sex offenders and certain convicted criminals would not be allowed to peddle treats if the bill becomes law. Read more

Charter school principal is fired - The new principal of Buffalo United Charter School, who was arrested twice in four months in 2003 for allegedly threatening his estranged wife, was fired Friday. Charter school officials apparently had been unaware of Michael P. Carr's criminal background until it was brought to their attention by a Buffalo News reporter earlier in the day. Read more

Rejection raises doubt about credit - The law requires companies to disclose the source of adverse actions against employees or potential employees, but only if the information came from an outside consumer-reporting agency. Read more

40 known felons employed by the University of Wisconsin System Read more

The Rules Have Changed for Corporate Criminals - Have You Ever Been Convicted of a Felony? Read more

InfoLink Screening Services Joins Kroll's Background Screening Division
Kroll Inc., the global risk consulting company, announced today that it has completed the acquisition of InfoLink Screening Services, Inc., a leading, privately-held background screening company headquartered in Chatsworth, Calif., a Los Angeles suburb. InfoLink will operate as the West Coast hub office for Kroll’s Background Screening division, which is headquartered in Nashville, Tenn. Read more

Background checks get more important
Companies are relying more on pre-employment background checks to ease security concerns and protect against costly lawsuits. “It’s getting more important,” said privacy lawyer Robert Belair, editor of the Privacy and American Business newsletter. “The incidence of negligent hiring lawsuits is way up.” Read more

Meth Taking Toll on Businesses, State
Meth use has increased among U.S. workers by 86 percent over the past five years. It also jumped 13 percent in the first half of 2005 among workers in jobs and industries required by the federal government to test employees in high-risk and safety-related positions.
Read more

Background check nabs robbery suspect
Louisville police get break in Georgia. A man wanted in two armed robberies in Louisville was arrested yesterday after applying for a job at a charitable organization in Macon, Ga. Read more

Spherion temps indicted in fraud
Temporary workers who were assigned to Red Cross call centers by Spherion have been accused of giving away thousands of dollars intended for Hurricane Katrina. At least 17 workers placed at a Red Cross call center by Fort Lauderdale-based Spherion have been indicted on fraud charges, raising the issue of screening checks done by staffing agencies that supply temporary workers. Read more

Security personnel rely on background screening for new hires
Without a national database from which to retrieve information, and with no such system likely to be put in place any time soon, security and human resources personnel are relying on background screeners and their network of researchers to comb court documents and determine whether potential employees meet a company's hiring criteria. Read more

Who is checking the background checkers?
Some 80 percent of employers now require background checks for all potential employees, according to the Privacy Rights Clearinghouse (PRC), a consumer rights advocacy group in San Diego…. But what if a background check is in error? Read more

Day Care Background Checks in Backlog
After pre-schools and daycares hire teachers, they have to pass a background check if they're going to stay on the job. The process is supposed to be quick so that teachers with trouble in their past can be fired before they do any more damage. But the state agency handling the background checks is badly backlogged. The result is long delays. Read more

Football camps didn't check most workers
Six employees of the University of Colorado's youth football camp had criminal records that weren't discovered until after the camps had occurred - including one convicted of misdemeanor child abuse, according to a state audit released Monday.Read more

Church requiring background check for all personnel
When the New Year arrives, every member of the staff at the United Methodist Church of La Mirada and every Sunday School teacher, counselor and volunteer will have undergone a background check. It's just one of the policies instituted by the La Mirada church and all of the United Methodist churches in Southern California, Guam, Hawaii and Saipan as part of an effort to stem any sex abuse scandals that have rocked the Catholic Church from occurring in United Methodist churches. Read more

Who is checking the background checkers?

November 28, 2005 - By Matt Bradley, Contributor to The Christian Science Monitor

John McDonald used to spend hours perfecting his résumé and cover letters before applying for information-technology jobs in his native Boston. But after one potential employer hired a screening agency to investigate his background two years ago, the results have stifled his ambition.

After two weeks of silence from his potential employer, Mr. McDonald pressed the company to let him see his background check report. It stated that he'd failed to disclose an arrest, had used two aliases, and had reported two false employers. McDonald was dumbfounded by all three claims, which he maintains are erroneous.

"I didn't know what to do - still don't," says McDonald about his predicament. "It wasn't a matter of 'I know I'm not going to get [a job],' it was a matter of 'I'm probably not going to get it,' so I have this halfhearted effort."

Over the past several years, background screening has become a boom industry, fueled by increasing concerns about security and legal liability. Some 80 percent of employers now require background checks for all potential employees, according to the Privacy Rights Clearinghouse (PRC), a consumer rights advocacy group in San Diego.

But what if a background check is in error? With little money for legal help, McDonald went to the PRC, whose website provides some assistance free of charge.

"There are many low-level, day-to-day problems that people experience where a lawyer's advice could come in handy," says Tena Friery, the PRC's research director. "Generally, people who have these sorts of problems don't have a lot of money to pay for an attorney."

Industry insiders credit the 9/11 attacks and several high-profile court cases for the growing demand for screeners. One such case involved Boston-based Trusted Health Resources Inc., which went bankrupt after one of its home health aides murdered a patient and his grandmother. In 1998, a jury awarded the patient's family $26.5 million after records showed the caretaker had a criminal record. Today, background screening is a $3 billion industry in the United States.

"There is a much higher level of awareness that doing a background screen is of benefit to the company, clients, its employees, and the person being screened," says Mary Poquette, the cochair of the National Association of Professional Background Screeners. "That's a different view from what we saw even as recently as four years ago."

For many clients, says Ms. Poquette, the numbers speak for themselves. For the first half of this year, 8.3 percent of job applications examined by InfoLink Screening Services in Chatsworth, Calif., revealed some kind of criminal record. (InfoLink merely reports its findings; it does not compare its findings with what someone stated on an application.)

"This is a really amazing figure when you consider that people knew they were going to have a background check," says InfoLink president Barry Nadell. Routine screening of 1,600 volunteers for the Los Angeles County Fair turned up at least three registered sex offenders.
InfoLink's recommended search is four-pronged. First, it checks court records in each county where the job applicant lived, going back at least seven years. Next, the company runs a motor vehicle report, which can uncover convictions the applicant may not have reported. A Social Security number check helps verify the subject's identity, past residences, and possible aliases. The applicant's name may also be run through other records, including incarceration listings, sex-offender lists, and court records.

InfoLink then calls county courts at random to double-check researchers' findings. Depending on the number of applicants and the jurisdiction (court fees vary), Mr. Nadell says a single screening costs from $15 to $50. Those fees can add up, so there's a movement among employers to cut costs, Nadell says.

"Some are using strictly databases," he says, "and that's very concerning to our industry because of the inaccuracies that reside in databases. The industry's error rate [among screeners who personally verify database records] is probably less than one in thousands. It's very small."
The most common mistakes, says Nadell, come from sloppy court records and databases.
But as the background-checking industry continues to grow, who screens the screeners? While laws concerning background checks vary from state to state, the federal Fair Credit Reporting Act sets the minimum standard. Under the law, employers must seek the written consent of applicants prior to the screening. And before an employer can reject a potential employee based on his or her background check, the applicant has the right to receive, review, and dispute the findings.

Job applicants also have the right to sue a screening company if errors on a report were the result of negligence.

If the employer uses a background screening company whose disclosure and authorization form for a background check includes a waiver to indemnify the screening company, "that means the company doesn't understand the law," Nadell says. "How do you trust the screening company ... if they won't be responsible for their own negligence?"

Regardless of whether the screening findings were accurate or not, the fact that McDonald was not given the opportunity to review and dispute his background report may mean that his potential employer violated federal law.

"One of the things I didn't know was that it was illegal for them not to provide a copy of my background check," McDonald says. "They said, 'We'll get to it as soon as we can, as soon as someone's available.' And then there were no responses."

McDonald has not found formal employment since that fateful background report. He has chosen to avoid the issue by working as an independent information technology contractor for smaller firms that cannot afford background checks. But with low-paying temporary work, McDonald says clearing his own name seems like a daunting task. "The information out there is vast," he says. "It's kind of hard to come up with large sums of money to do anything."

By the numbers

A study of job applications put through a preemployment screening process reveals that many job-seekers have something they may be reluctant to put on an application. InfoLink, a provider of employment background checks, examined tens of thousands of job applications from January through June. It found that:
41.6% had a violation on record with the Department of Motor Vehicles.
39.2% had bad credit, such as an account that went to a collection agency.
26.4% had discrepancies in their résumés about past employment.
8.3% had a criminal record.
8.2% inaccurately reported their level of education.
3.3% had tested positive for illegal drugs.

Source: InfoLink Screening Services

Online Screening Saves Time and Money.
User-friendly tests and carefully thought-out assessments can help you find better candidates faster. Technology can’t make your hiring decisions for you, but effective online programs can add efficiency to your screening and candidate assessment processes. Used properly, these programs are particularly good at the early step of weeding out unqualified candidates. Read more

Private Schools May Check Workers - Lawmakers are considering plan for background inquiries.
High school referees, vending machine deliverymen and plumbers have to undergo extensive criminal background checks now under a new sex offender law if they do their work on public school property. Read more

Employment Screening – Justifying the Expense
Measuring cost per denial is an effective method of calculating the ROI of a company’s employment screening program.Read more.

Technology's Impact on Background Screening
Technology advances continue to impact the way we conduct business and are having a profound effect on the background screening industry. Advances in integrating information systems are creating the capability to access business information easily through one source, which is transforming background screening systems that have historically been standalone feeds.Read more.

Study Finds FBI Criminal Database Search Ineffective for Employment Background Checks
August 26, 7:45 am ET

DURHAM, N.C., Aug. 26 /PRNewswire/ -- As US employers increasingly utilize criminal background checks in their hiring process, the National Association of Professional Background Screeners (NAPBS) has identified one source of information that employers should avoid: the FBI Criminal Database.

In reaction to recent proposed federal legislation that would allow employers direct access to the FBI's database, NAPBS commissioned a study to evaluate the accuracy and completeness of this FBI criminal search.

The results were shocking.

The study found that in a significant percentage of searches, the FBI database returned erroneous or incomplete information.

The study, conducted by Craig N. Winston, an assistant professor of criminal justice at Sonoma State University, found that the FBI data lacks proper identifiers to credibly link a criminal hit with the subject of the investigation.

Another finding was the large number of missed records and false positives generated. For example, when analyzing a sampling of 93,274 background checks in the state of Florida, Winston's search revealed that the database missed 11.7 percent of the criminal records it should have identified. Even worse - of the more than 10,000 criminal records found, 5.5 percent of them were falsely attributed to those who were not convicted of a crime.

The Fair Credit Reporting Act (FCRA) compels employers to use the most up- to-date and accurate information when screening applicants for employment.

NAPBS co-chair Jason B. Morris says, "If employers are granted access to the FBI's data, they can easily be lulled into the false sense of security that they are availing themselves of the most accurate and comprehensive search available. As a result, they could be opening themselves to increased risk in the workplace and litigation from wronged job applicants."

Results from this comprehensive study can be found at http://www.napbs.com.

Founded as a non-profit trade association in 2003, the National Association of Professional Background Screeners (NAPBS) was established to promote ethical business practices, promote compliance with the Fair Credit Reporting Act and foster awareness of issues related to consumer protection and privacy rights within the background screening industry.

Media Contact: Tracy Seabrook NAPBS 919.433.0123 info@napbs.com

Background Screening News

Background checks could have problems
More and more employers require employee background checks, which is why it's no surprise more and more private companies are popping up offering to provide them. A Target Five Investigation shows it can be risky business. A bad background check nearly cost Eric Williams a job. Read more.

Protect Your Organization Against Negligent Hiring Suits
Speaking to a packed house June 20 during his session at the SHRM Annual Conference and Exposition, Nadell said that nothing takes the place of thorough applicant background checking. However, no background checking process is foolproof, so it's crucial for companies to know how to obtain the most accurate information while remaining compliant with the myriad federal and state laws that regulate the industry. Read more.

Cape writer's family sues over death
$10m filing names murder defendant and his employer
By Ralph Ranalli, Globe Staff - May 18, 2005

The family of slain Truro writer Christa Worthington has filed a $10 million wrongful death lawsuit against her alleged killer and the Cape Cod trash-hauling business that employed him at the time of the slaying, lawyers said yesterday.

Christopher M. McCowen, 33, was arrested last month and charged with Worthington's rape and murder after a DNA sample he gave voluntarily was matched to evidence found at the crime scene. At the time, McCowen was working as a hauler for the Cape Cod Disposal Co. , and made weekly visits to Worthington's Depot Road home to pick up her garbage.

In a lawsuit made public yesterday, a lawyer for Worthington's estate made a $10 million wrongful death claim against both McCowen and CCDC Equipment Services, Cape Cod Disposal's parent company, alleging that both were culpable in her death.

The lawsuit charges that Worthington suffered ''great pain of body and anguish of mind" at McCowen's hands and that Cape Cod Disposal ''had an obligation to use reasonable care in selecting and retaining its employees to be sent to the homes of its customers."

The company, the lawsuit alleges, failed to use reasonable care in hiring McCowen, ''who had a history of criminal and violent behavior including but not limited to burglary, grand theft, trafficking in stolen property, felony assault, and threats to women which resulted in the issuance of restraining orders."

By hiring McCowen, the company put him in a position to familiarize himself with Worthington's home and routine, the lawsuit contends.

Weymouth lawyer Chester Tennyson Jr. confirmed yesterday that he filed the lawsuit earlier this month on behalf of Worthington's estate, which is administered by her father, Christopher Worthington, and BankNorth. Worthington's daughter, Ava, who was 2 years old at the time of the killing and was found clinging to her mother's lifeless body, is a beneficiary of the estate.
Tennyson said he would have no comment on the Barnstable Superior Court lawsuit and that he had asked Worthington's relatives to refrain from talking, as well.

''We'll do our only talking in the courtroom," he said.

Francis O'Boy, McCowen's Taunton-based lawyer, also declined to comment on the lawsuit yesterday. A lawyer for Cape Cod Disposal, however, said that the company admits no liability and plans to aggressively defend itself in the lawsuit.

''First of all, it has to be proven that he [McCowen] committed the act he is accused of committing," lawyer Bruce Bierhans said. ''Then the family has to prove that my client could not only have foreseen the crime, but could also have prevented it. Under Massachusetts law, the family has a very substantial burden of proof."

''This is not a nursing home or a day-care center; they are hiring people to pick up garbage," Bierhans said. ''We believe, and it will be our position in court that Cape Cod Disposal was fully in compliance with all of their obligations under the law."

In the criminal case, a state judge yesterday rejected O'Boy's petition that McCowen be released on $50,000 cash bail and ordered him to remain in jail pending trial.

According to recently unsealed court documents, McCowen insisted to police last year that he did not kill Worthington.

State Police investigators interviewed McCowen twice, once three months after the January 2002 slaying and again two years later. After the second interview, McCowen volunteered to have a sample of his DNA taken by swab. That sample was matched last month to DNA taken from Worthington's body, according to court documents made public yesterday.

According to the affidavit, McCowen said he had limited contact with Worthington; although he went to her house every Thursday, he said he did not know her and never went inside.

''Chris McCowen stated that Christa Worthington would occasionally watch him from inside her home through the front door and would sometimes wave," Trooper Christopher S. Mason wrote of the 2002 interview in an affidavit filed two months ago in support of the murder charges against McCowen.

© Copyright 2005 The New York Times Company

Background Screening News

Employers Win Most Drug Testing Cases
David Shadovitz, Human Resource Executive

A new book released by the Institute for a Drug Free Workplace in Washington reveals that employers are winning most drug testing related court battles. Employers prevailed in roughly two-thirds of the nearly 1,200 legal decisions on drug testing, according to the book, 2004-2005 Guide to State and Federal Drug Testing Laws.

In the last year,” says Gina M. Petro, counsel to the institute and a co-author of the guide, “87 court decisions upheld drug testing, and 46 did not.” Since the group began tracking suits in the mid-1980’s, employers prevailed in 825 cases, while challenges have been successful in only 374 cases. The numbers are somewhat higher for federal court cases, in which employers have prevailed 76 percent of the time.


Criminal background checks incomplete How convicted felons can slip through safety net
By Bob Sullivan, Technology correspondent, MSNBC
Updated: 5:06 p.m. ET April 12, 2005

Is there a felon in the next cubicle? What about in your child's afterschool athletic league?
Employers and volunteer organizations are increasingly turning to national commercial database searches provided by private firms to ferret out potential convicts from their ranks. The searches are quick, inexpensive, and promise nationwide coverage -- in theory, preventing convicted felons from moving away from a checkered past.

But experts say the nationwide tallies are often full of holes, and contain as few as 70 percent of all felony conviction records, leading in turn to a false sense of security. Read article at MSNBC.

LexisNexis: Files May Have Been Breached
LexisNexis Says Thieves May Have Breached Computer Files Containing Information of 310,000 People

Criminals may have breached computer files containing the personal information of 310,000 people, a tenfold increase over a previous estimate of how much data was stolen from information broker LexisNexis, the company's parent said Tuesday.
Last month, London-based publisher and data broker Reed Elsevier Group PLC said criminals may have accessed personal details of 32,000 people via a breach of its recently acquired Seisint unit, part of Dayton, Ohio-based LexisNexis. LexisNexis is a Reed subsidiary.
Reed said it identified 59 instances since January 2003 in which identifying information such as Social Security numbers or driver's license numbers may have been fraudulently acquired on thousands of people. Read article…

Background Screening News

The Importance of a Complete Background Check
Criminals are learning that the primary identifier in court records is date of birth and that they can conceal their past by providing a false DOB. In his new book “Sleuthing 101, Background Checks and The Law,” Barry J. Nadell, President of InfoLink advises employers to always conduct a motor vehicle report as part of their background screening program… even if the job position does not include driving. Read more…

Lack of Background Check Leads to Liability
Blair v. Defender Services Inc., 4th Cir., No. 03-1280, Oct. 25, 2004. A college student was allowed to pursue her claims for negligent hiring and retention against a janitorial staffing service after allegedly being attacked by an employee of that service, the 4th U.S. Circuit Court of Appeals has held. Read more…

Bad Data Fouls Background ChecksWhile recent news has folks concerned about identity theft, inaccurate data is just as big a danger -- and individuals are left to police the problem themselves. Read more…

Hiring Presents Tricky Areas for Employers
A welter of federal and state laws and legal decisions — and fears of lawsuits — have put tight constraints on what information you can ask someone you're considering for a job, or what information you can give about a former employee. Read more…

Banking body lists security breaches amid data fears
Amid growing concern about identity theft, a US banking regulator on Thursday detailed several instances of security breaches at banks and previewed new guidelines on when banks must tell the customers about such lapses. Amy Friend, assistant chief counsel at the Office of the Comptroller of the Currency, said that in one instance, the agency “directed a large bank to improve its employee screening policies” after determining that the bank had “inadvertently permitted a convicted felon, who engaged in identity theft-related crimes” to become an employee.

Did ChoicePoint End Run Backfire?
By Joseph Menn, LA Times, March 13, 2005

The data-collecting company has managed to avoid being bogged down by regulations -- until maybe now.

ALPHARETTA, Ga. — ChoicePoint Inc. was created to avoid just the sort of mess in which it now finds itself.

The nation's biggest private collector of personal information was spun off seven years ago from credit bureau Equifax Inc. largely to get around laws restricting the way such bureaus sell data.

Because it was not considered a financial services company, ChoicePoint was not subject to data laws, and for years the plan worked like a charm.

Freed from regulation, the company saw sales more than double — and its profit and stock price more than quadruple — as businesses demanded more data to manage risks and target marketing. ChoicePoint became the quintessential Information Age company, culling all manner of sensitive facts and figures about virtually every adult in the United States, some 19 billion records in all.

But in the wake of a security breach that allowed a ring of identity thieves to peruse tens of thousands of those records, ChoicePoint suddenly faces the sort of government oversight that it and similar companies have sought to avoid.

The Securities and Exchange Commission and other regulators are investigating ChoicePoint's practices. Last week, the Senate Banking Committee held the first in a series of congressional hearings. Legislators and industry experts predict new regulation of ChoicePoint and competing information brokers that compile and sell Social Security numbers, driver's license numbers and financial histories to tens of thousands of customers, including lenders, landlords and many of the Fortune 500.

"It's very unfortunate," said former ChoicePoint Vice President Catherine Aldrich. "They are a victim of a really heinous crime, and they are going to be really penalized — the whole industry is."

Privacy advocates disagree, saying ChoicePoint brought the prospect of more vigorous regulation on itself with an aggressive push to find new customers. They note that the recent breach was only the most widely publicized and that ChoicePoint has erred before — as during the 2000 election, when it was hired by the state of Florida to run background checks on voters.

Chief Executive Derek V. Smith and other company officers declined repeated interview requests, as did company directors.

In regulatory filings and news releases, though, the company has said it is cracking down on potential identity thieves by turning away some customers, giving up a projected $15 million to $20 million in annual revenue. Last year, the company posted profit of $148 million on sales of $919 million.

In a statement to Congress last week, ChoicePoint said it could live with some measure of new regulation. In the past, information brokers have offered support for legislation and then succeeded in watering it down, according to a new book on the industry, "No Place to Hide: Behind the Scenes of Our Emerging Surveillance Society" by Robert O'Harrow Jr.

Information Raid

The latest problems erupted when con artists posing as small-business owners looked up sensitive information on 145,000 individuals.

ChoicePoint then made several missteps. Forced to notify California consumers under a law that took effect in 2003, ChoicePoint initially said only 35,000 state residents were at risk. Only later did it acknowledge the national scope of the breach. After that, CEO Smith said the incident was the first of its kind. But The Times soon discovered that, in fact, a similar episode had occurred in 2002.

Meanwhile, ChoicePoint still hasn't checked for people who might have been victimized before the California law went into effect.

All in all, ChoicePoint's handling of the affair has only added to the chorus calling for tighter regulation.

"They probably were too cavalier about it," said analyst Brandt Sakakeeny of Deutsche Bank Securities. "They didn't expect the firestorm that they've got."

That might be because despite all the company's knowledge about the people in its databases, ChoicePoint has few direct dealings with them.

The same isn't true of Equifax, Experian Ltd. and Trans Union Corp., which must address errors in the credit reports they compile. Although ChoicePoint resells information from the three bureaus, it doesn't have to take responsibility for the content.

That legal loophole, which Congress may soon shut, has been a tremendous boon to ChoicePoint. And the company has benefited from the wording in other laws as well. Financial institutions, including banks and other lenders, face much more onerous regulation about what they can do with customer data. ChoicePoint says it doesn't meet the definition of a financial institution.

"There are a lot of dark crevices in the law that need to be opened up and filled in," said Daniel Solove, author of "The Digital Person: Technology and Privacy in the Information Age."

ChoicePoint has flourished by exploiting such regulatory weak spots, even in insurance services, its oldest and most profitable line of business. The company keeps a database of insurance claims by holders of auto and homeowner policies. Insurers submit those records to the database and check new applicants against it.

State Sen. Jackie Speier (D-Hillsborough) and other critics say that consumers often don't know the database has been tapped or what's in it; that the files can include errors that go uncorrected; and that insurers even count simple inquiries that don't lead to the filing of a claim as a strike against policyholders.

Speier, who pushed a 2003 bill that would have curtailed the practice, maintains that insurers sometimes use the information to discriminate against customers. The state Insurance Department says one insurer, for example, refused to cover a San Francisco homeowner who had once asked her agent if she was covered for a clogged pipe.

Data and More Data

More frequent targets for critics have been ChoicePoint acquisitions that specialize in collecting widely dispersed public records, including legal judgments, liens and voter registration information, and then tying them to more sensitive data such as Social Security numbers and driver's licenses.

ChoicePoint bought Santa Ana-based CDB Infotek in 1996, shortly before spinning off from Equifax, and added Database Technologies Inc. in 2000. The next year, Database Technologies came under fire for having given Florida election officials a list of thousands of suspected felons that state officials used to bar people from voting.

The list was riddled with errors, and many of the accused were black Democrats. At least 1,000 people were improperly kept from voting, more than George W. Bush's margin of victory. The NAACP sued. ChoicePoint blamed Florida officials for asking for near-matches without making confirmation checks on their own. ChoicePoint settled the case in 2002 and agreed to reprocess its list of suspected ex-cons.

Although ChoicePoint's government deals generate only about 10% of revenue, Sakakeeny said, the company made the area a top priority after the Sept. 11 terrorist attacks, and the firm won a four-year, $67-million contract with the Justice Department. Local police, the FBI and other agencies are big customers, in part because laws prevent the authorities from keeping close tabs on those who aren't suspected of a crime.

"These government agencies are increasingly outsourcing various law enforcement and intelligence functions," Solove said. In a sense, he added, the government doesn't even need its own surveillance program. "It can achieve the same goal by having these companies do the work for them."

Yet ChoicePoint's government work has brought criticism from civil liberties groups.

"Individuals need to give their information to third parties in order to participate in society," Chris Hoofnagle, an attorney with the Electronic Privacy Information Center, wrote in a law journal last year. "It is unfair to cede all individuals' rights to a company that can simply hand over personal information to law enforcement."

Several foreign governments also launched investigations after ChoicePoint acquired secret information on their citizens. Mexico placed three accused middlemen under house arrest for their suspected roles in helping ChoicePoint buy the entire country's voting rolls, which are protected under federal law.

Despite the backlash, ChoicePoint has indicated that it wants to go much further in mining for information. The company has been working on a secret database prototype for the FBI. And Smith, the CEO, has pressed for the expansion of DNA collection from criminals and others, as well as for parents to take DNA samples from their children.

"In the near future, identity, so weakened by fallible representations like birth dates and Social Security numbers, will be anchored by infallible genetic markers," Smith wrote in his 2004 book "Risk Revolution."

Although such sentiments have alarmed privacy advocates, ChoicePoint has taken the most flak for the way it peddles far more workaday information.

The Nigerian fraud rings that repeatedly penetrated ChoicePoint's databases passed themselves off as legitimate small companies interested in tapping people's addresses, phone listings, Social Security numbers and credit reports.

The company stresses that it doesn't grant access to information to just anybody. But it has opened its arms much wider in recent years.

Backgrounds Exposed

The clearest case is a product called Employee Background Check, which was sold in 2003 to the general public at Sam's Club stores for less than $40. ( ChoicePoint's lead outside director, Thomas Coughlin, recently retired as vice chairman of Wal-Mart Stores Inc., where he oversaw the U.S. operations of Sam's Club.) The kit, since pulled from the market, featured many of ChoicePoint's databases and allowed customers armed with someone else's Social Security number to look up identifying information and possible criminal records.

Ostensibly aimed at employers, the product did little to weed out nosy neighbors or crooks.

The package came with a seal reading "Business License Required." But the online registration forms, which took less than half an hour to complete, didn't ask users to submit a license number, according to Pam Dixon, founder of nonprofit research group World Privacy Forum.

And though users were supposed to have the approval of purported job candidates for some searches, all ChoicePoint demanded was that customers check an electronic box marked "candidate authorization obtained?"

The company told users they might be audited, but Dixon said she bought a kit and never got so much as a phone call asking who she was.

"It was the single most insecure background check product I have ever seen in my life," she said.

In some eyes, the Sam's Club sales exemplified ChoicePoint's drive to trade wider access to its information for greater revenue.

"The public records side had really stagnated," said Aldrich, the former vice president, who now works at an employee-screening firm. Even so, she called the kit decision "a really odd thing."

CEO Smith has called for a broad discussion of how the increased flow of information can be used for good and ill.

"The electronic 'pipeline' is not the problem," he wrote. "The problem is society's continuing delay in implementing consistent, coherent standards and guidelines to monitor and protect the flow."

But by putting profit above all else, some analysts say, Smith has lost his shot at driving that conversation.

"They should have taken a stronger leadership role on the process, in who they disclose to," said Gartner Inc. financial security analyst Avivah Litan. "Companies like ChoicePoint can't see the forest for the trees."

*
Times staff writer David Colker and researchers John Tyrrell and Penny Love contributed to this report.

ChoicePoint Inc. said Tuesday, February 15 that it began sending letters to 35,000 California residents to tell them that their personal information may have been compromised by a fraud ring that obtained credit reports, Social Security numbers and other information on as many as 100,000 victims nationwide in a massive case of identity theft.

Fraud Ring Taps Into Credit Data
L.A. Times

Data theft case widens; 750 fraud victims found
MSNBC

Californians warned that hackers may have stolen their data
USA Today

More Than 70 Percent of HR Professionals Say Reference Checking is Effective in Identifying Poor Performers

(Alexandria, Va., February 3, 2005)—Nearly 40 percent of HR professionals report that over the last three years they have increased the amount of time spent on reference checking for potential employees, according to the 2005 Reference Checking Survey released by the Society for Human Resource Management (SHRM.)

Most organizations conduct reference and background checks as part of their screening process. Seventy-three percent of survey respondents say that reference checking is somewhat or very effective in identifying poor performers.

“Being able to identify unqualified candidates during the recruiting process saves organizations time and money,” said Susan R. Meisinger, SPHR, president and CEO of SHRM. “Employees provide the competitive edge for a successful business, making it critically important for organizations to be able to recruit the right people. With new technologies, reference and background checking has become easier to conduct and increasingly more important to organizations who want to get a complete picture of the job candidates they consider hiring.”

Ninety-six percent of organizations conduct some kind of background or reference check. Although much reference checking is conducted in-house, 52 percent of survey respondents report that their organization outsources at least part of their reference checking or verification.

Survey respondents report that reference checks have found inconsistencies in areas including certifications, eligibility to work in the United States, degrees conferred, schools attended, and malpractice or professional disciplinary action. The most common inconsistencies - found by about half of survey respondents - are inconsistencies in dates of previous employment, criminal records, former job titles, and past salaries.

Organizations are responsible for checking the references of potential employees, but also are asked to provide reference information about former employees. Due to a fear of liability, 54 percent of organizations have policies to not provide employee references. Yet, 75 percent of HR professionals believe their organization would share more information about current and former employees if there were laws clearly protecting them from legal liability.

The survey was based on 345 responses from a random sample of SHRM members.

###

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 190,000 individual members, the Society's mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society's mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 500 affiliated chapters and members in more than 100 countries. Visit SHRM Online at www.shrm.org

Background Screening News

Background checks save costly errors
The News Journal, DE
By the time a new employee takes their lunch break on the first day at work, a company has paid that person more than the cost of the background check ...

Backman fired after background check shows problems
San Jose Mercury News, CA
Arizona brass did not conduct a criminal background check on Backman before hiring him and were not aware that he had been arrested for driving under the influence...

What Every Employer Should Know about Drug Testing in the Workplace

American business has a drug problem. According to the U.S. Department of Labor, more than 8 million Americans use some type of illegal substance. As many as 73 percent of all illicit drug users in this country are employed.

Occupational Hazards
by Sandy Smith

A Gallup Survey of employees conducted by the Institute for a Drug-Free Workplace found that 37 percent of all respondents said that workplace drug use problems had increased in the last 5 years. A majority of respondents supported drug-screening tests. In general, it appears that respondents placed the greatest emphasis on drug testing for those employed in occupations where one person has direct responsibility for many.

As part of the federal government's effort to address the issue of substance abuse in the workplace, the Drug-Free Workplace Act of 1988 was enacted as part of the omnibus drug legislation. This Act - in effect since March 18, 1989 - requires contractors and grantees of federal agencies to agree to provide drug-free workplaces as a precondition of receiving a contract or grant from a Federal agency.

According to Edward Poole, president and COO of OHS Health and Safety Services Inc., Costa Mesa, Calif., several government and private industry studies concluded that each drug user in the workplace "can cost an employer an average of $11,000-$13,000 annually." That adds up to a cost to American businesses of billions in healthcare costs, lost production time, injuries and damage to equipment and facilities. And chances are good, says Poole, that if your employer does not have a drug-free workplace policy and program, then he or she has at least one drug user on the payroll.

It Can't Happen Here

Despite studies and surveys indicating that a significant number of substance abusers hold jobs and work while under the influence, Poole points out that many employers have an "it can't happen here" attitude about substance abuse in the workplace.

"Once they get in there and implement a policy and start testing employees, they're usually very surprised by the results," he says.

Poole tells the story of one client who operated a small, local delivery service. When a representative from OHS Health and Safety Services visited the business owner, he was told repeatedly that there was no reason to conduct drug testing in that workplace. After all, the company had only 63 employees. After a couple of years of rebuffing them, the delivery service owner called OHS.

"He said, 'We're having some problems. There's something going on that's kind of strange. We want to start a drug-free workplace program,'" Poole recalls. (See sidebar on page XX for steps to create a drug-free workplace program.)

OHS helped him write up a company policy about drugs and drug use in the workplace. They posted signs stating it was a drug-free workplace, and passed out pamphlets to employees.

Forty-five days later, OHS showed up unannounced and did what's called a "sweep." He was going to test every employee in the workplace. Nine people immediately walked off the job. Says Poole, "One or two probably had deeply rooted beliefs in the right to privacy and all that crap, but it is probably safe to say that most of those nine employees would have tested positive." Out of the 54 who took the drug test, 19 tested positive for marijuana and several tested positive for cocaine as well. "The employer was shocked," says Poole, "shocked. Most employers have no clue how many employees are working under the influence."

Writing a Policy

The first step toward eliminating workplace drug and alcohol use is the establishment of a drug-free workplace policy. The U.S. Department of Labor (DOL) offers a Drug-Free Workplace Advisor at www.dol.gov/elaws/drugfree.htm that offers guidance on how to develop a drug- and alcohol-free workplace. According to DOL, the policy should lay the groundwork for your program and should answer several questions, including:
1. What is the purpose/goal of your program?
2. Who will be covered by your policy?
3. When will your policy apply?
4. What behavior will be prohibited?
5. Will employees be required to notify you of drug-related convictions?
6. Will your policy include searches?
7. Will your program include drug testing?
8. What will the consequences be if your policy is violated?
9. Will there be return-to-work agreements?
10. What type of assistance will be available?

The policy "spells out, in black and white, the employer's policy about drugs in the workplace. It should be explicit about what will not be tolerated," says Poole.

Once the policy is established and communicated to employees through workplace signage, take-home materials and workplace briefings, employers might want to take the next step and begin drug-testing current employees and new hires. (Poole cautions employers to determine the legality of drug testing in their state before instituting a program.)

Types of Testing

There are several types of drug-testing procedures available, including blood, urine and hair specimen testing. Poole says that blood tests are usually only used in extreme cases, such as the employee being unconscious as the result of a workplace accident and under the care of emergency room physicians or, in certain cases, as demanded by a court order. Hair specimen testing costs about $115-$150 per test nationally, Poole estimates. "Hair can indicate drug-use as far back as 90 days," says Poole. "Most drugs are detectable in urine for only 1-4 days."

Of the approximately 55 million drug tests performed in the United States each year, 90 percent are urine tests. Poole estimates the cost of urine specimen drug testing at approximately $44 per employee.

The rumors that it is relatively easy to "cheat" a drug test are highly exaggerated, says Poole. Most of those products must be ingested repeatedly for hours before the test is administered. So, even if they do work, such products would only be useful for scheduled drug tests, which is something most employers offer only to new hires.

Poole suggests that employers make offers to new employees contingent upon them passing a drug test. He also says that testing employees following accidents and near-misses is advisable, as is testing any employee you suspect to be under the influence. Again, he cautions, check with state employment and privacy laws to ensure the legality of your testing program. As for random tests, the industry standard is to always test 50 percent of the total number of employees each year.

Testing Results

Poole uses the following example to show the cost/benefit analysis of drug testing: A company with 100 employees with an annual turnover rate of 30 percent has a cost per drug test of $44. If the company tests all 30 new hires and conducts random drug tests of 50 percent of its employees, then it is conducting 80 tests per year. Add in another 20 drug tests annually, ordered as "post-accident" or due to "reasonable suspicion," for a total of 100 drug tests per year.

"At $44 per test, that means the company is investing $4,400 per year in what would be - I assure you - a very highly effective drug-free workplace program," says Poole.

He notes that in the first 3-4 months of newly instituted random drug testing of their employees, every company can expect drug "positive" rates of anywhere from 5 percent to 22 percent. Construction companies and food service tend to rank on the high end of the positive scale, he adds. Retail and office workers tend to have fewer positive drug tests.

"By the end of the first full year – at the latest – the rate of drug positives coming back on the lab reports will drop by 50 percent to 80 percent," says Poole. "Drug positive rates of 26 percent will drop to as little as 5 percent and positive rates of 5 percent will drop to as low as 1 percent."

Soon, the company that once had 100 employees that included anywhere from five or six to 24 workers who used drugs in the workplace and perhaps even dealt drugs in the workplace becomes a drug-free workplace. Company production increases and quality of products and services improve. Sick days are fewer; injuries decrease; the number of workers' compensation claims get reduced; insurance and workers' compensation premiums stabilize; and equipment and supplies stop being damaged or disappearing as frequently.

"Let's look a bit more closely at the average $4,400 annual outlay that a company of 100 likely needs to invest to reach an effective, year-around drug testing program. Based on 365 days, the hard cost of drug testing for the company dilutes to only $12.05 per day. With 100 employees, that's about 12 cents per day per employee, or less than one-half the cost today of making a local call from a corner payphone," says Poole. "Wouldn't you say that's a sound investment?"


Sidebar: Steps to a Successful Drug-Free Workplace Program

According to Edward Poole, president and COO of OHS Health & Safety Services Inc., there are 14 steps to a successful drug-free workplace program.

1. Prepare a written "drug-free workplace" policy for your legal protection and provide a copy for all employees. Have the acknowledgment of their review and understanding of it signed and dated by them and place it in their personnel file. According to Poole, 14 states have laws requiring a written drug testing policy; two states require state-approval of the policy before implementing a drug testing program. Such a policy should have the following elements: statement of purpose; coverage and implementation; scope of testing; definitions of terms used; alcohol and drug-free workplace program; alcohol policy; legal drugs defined; illegal drugs defined; education and training required for supervisors and employees; substances to be screened; procedure for the collection of specimens; initial screening and test confirmation process; test results/reporting procedure/employee's right to retest; action level for "positive" test results; additional consequences for violation of the company's drug and alcohol policy; reservation of rights; identification of substance abusers; pre-employment, random, reasonable suspicion, post-accident and return-to-duty testing procedures; consequences of a refusal to submit to testing; testing after rehire; disciplinary action; employee responsibilities under the policy and a contact person.
2. Post "We Are a Drug-Free Workplace" or similar signs in the parking gate entrance, the entrance to your building and the lobby, the coffee room and above the employee time clock. Post similar signs where job applicants can see them. (The law in two states actually requires conspicuous posting of this type.)
3. Circulate substance-abuse prevention education materials (e.g., pamphlets/videos) to all supervisors, managers and other employees once annually. A short reminder notice of your drug-free workplace company policy - and perhaps some drug-abuse facts - should be included inside pay envelopes at least once per calendar quarter.
4. Perform pre-employment drug testing on every new hire. Those testing "positive" for drugs should have their employment offer immediately rescinded no matter how qualified they might otherwise appear to be for the position and no matter how badly you need to fill the position. (The law in five states requires that any drug testing be performed post-hire only; law in one state permits pre-employment testing only in conjunction with a "comprehensive physical" exam; rescission of the job offer can be made following a confirmed positive for illicit drugs.)
5. Include a statement - "Employment subject to passing a drug test" or "We drug test all new hires" - in all help-wanted advertisements. (The law of one state requires that at least 10 days notice be given to an employee prior to his or her drug test.)
6. Randomly drug test (laws permitting) at least 50 percent of your employee base annually. Depending on the number of employees you have, perform random testing at least once monthly or every week.
7. Test an employee for "reasonable suspicion" whenever reasonable cause is justified by virtue of their display of any behavioral or physical indicators of drug-use, including a dramatic change in work performance.
8. Arrange substance-abuse awareness training for supervisors and managers at least once per year. Such training will help them to identify the indicators of drug-use among their crew and teach them the most effective methods of isolating and preventing a possible drug-use related workplace problem before it becomes a crisis for your company.
9. "Post-accident" drug test an employee whenever justified by serious injury, damaged/loss of property, or life. (At least 40 states will consider a denial of workers' compensation benefits when an accident is caused by your employee whose post-accident drug test is positive for illicit drugs. The majority of those 40 states also will consider a denial of unemployment benefits for that same reason.
10. Use only federal/state certified labs for the analysis of all specimens that are sent to a lab. Laws in five states and in one U.S. territory require that all elements of a company drug-testing program - including the choice of testing lab - strictly follow U.S. Department of Transportation guidelines.
11. Have all specimens that initially test "positive" (including those based upon results of on-site drug test devices or kits) re-tested by a certified lab.
12. Utilize the services of a medical review officer for all positive results.
13. Ensure that all test results of employees are kept strictly confidential! Inform only those with a "need to know" of final drug test results and maintain all results with strict security.
14. Impose all terms of your company's written testing policy strictly, fairly and equally with all employees.

Sidebar: Drug-Free Workplace Act of 1988

As part of the federal government's effort to address the issue of substance abuse in the workplace, the Drug-Free Workplace Act of 1988 was enacted as part of the omnibus drug legislation. This Act - in effect since March 18, 1989 - requires contractors and grantees of federal agencies to agree to provide drug-free workplaces as a precondition of receiving a contract or grant from a federal agency.