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Fraud Exprosed Whot you Dont Could Cost your company millions - Joseph W.

Joseph W. Fraud Exprosed Whot you Dont Could Cost your company millions - Wiley Publishing, 2003. - 289 p.
ISBN: 0-471-27475-5
Download (direct link): fraudexposedwhatyoudont2003.pdf
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4. Ask the right questions. Skilled human resources professionals are quite adept at spotting inconsistencies and gaps in work and educational histories or incomplete answers to sensitive questions.
5. Conduct a competent background investigation.
While the time and resources required might seem to be a minor consideration, they can become costly, particularly in a large organization or in one that experiences fairly high turnover.
We have seen, from several sources, the suggested importance of preemployment background investigations. I supervised these programs in the FBI in both the field and at headquarters, to include the always popular White House Background Investigations program (top Cabinet officials and Federal judges). There is good news and bad news.
The good news is there is no more effective and, in the long run, efficient process to select employees than through the use of a professional, fair, well-designed, and well-run background and selection programs. It is a lot easier to avoid hiring problem personnel than it is to live with them and have to go through the troublesome and potentially expensive process of terminating them. There are excellent background investigation firms throughout the country that, depending on volume, can do basic background inquiries for about $50 per person. This is so because an increasing number of pertinent records are available online, so the days of someone walking around asking questions about every piece of an applicant’s history are long gone. That may still have to be done, and it can be more expensive, but most basic applicant information is probably available online, if the proper releases and authorizations have been provided by the applicant.
There are also companies and vendors who will sell or design software programs that permit an organization’s own human resources (HR) department to do these checks themselves. I have had no personal experience with these systems, but based on my work in the field I would suggest a careful evaluation. A competent, professional HR department can probably do fairly well with one of these systems, especially if the hires are local and the requirements are minimal (e.g., most employees come from the immediate town or county and the requirements are fairly basic: high school graduate? valid driver’s license? any arrest record in this town or county?)
If, however, the candidate has three degrees from colleges in other states or countries, has worked for seven previous employers, and has lived in six towns in four states and two countries, it may be a different matter altogether. Records systems vary from town to town, state to state, college to college, employer to employer, and country to country. Unless you have a top-flight HR department with a lot of experience in doing these things, it might be better to farm this work out. This is particularly true if your HR department is old Charlie, who is also the payroll clerk, shipping clerk, and assistant fire warden.
Examples of vendors, among many, providing such services are The United States Mutual Association, which is an association of 700 retailers who jointly maintain a database of millions of fraud cases in which both employees and nonemployees have been involved. Many of these cases never made it to a court proceeding, so they are unavailable through criminal records checks. The Association, based in Chicago, charges a per-inquiry fee for this service. Due Diligence is another provider that provides access to civil and criminal records in 30 states for a fee and claims that about one in ten searches uncovers a criminal
record. KnowX is a provider that for a fee will provide information on lawsuits, business records, liens, bankruptcies, and outstanding warrants. Credit agencies are, of course, a mainstay of many business-rating systems. The three primary agencies in the United States are Experian, Equifax, and Trans Union. Searches of these sources are regulated by the provisions of the Fair Credit Reporting Act. In addition, while not a vendor, the Social Security Administration allows online searches of social security numbers. A potential problem employee will often adopt the number of someone else, perhaps deceased, to increase the chances of gaining employment.12
Errors in background searches can occur in two directions, and neither one of them is good: (1) bad information may be missed, with the result that you hire a problem employee; (2) in some ways worse, the inexperienced person running the background may see false positives—information that looks bad enough to be disqualifying, were it accurate. This may come from any number of sources: an arrest that did not involve a conviction; a judgment that was later satisfied or withdrawn; an address that does not appear to check out when in fact it is valid. The possibilities are endless and many of them are caused by simple confusion. If you want to verify this, just run yourself in one of the many credit or data services, even with an identifying number such as your Social Security Account Number or date of birth, and see what you get back. There will probably be names and addresses associated with you that may be keying errors by some clerk several years back, the name of a child or ex-spouse that is still linked to your credit history, or information that shows you apparently living in two places at the same time. Throw in factors like being a Junior when your Father was the Senior, or having a common name, and it only gets worse. False positives can lengthen and confuse the hiring process, but their greatest risk is legal liability. When you reject an otherwise qualified applicant on the basis of a false positive, there may be potential liability.
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