Employee, tenant screenings limit your liability

Lance Henderson

A while back, there was an opening at Ferndale Family Dental.

One day a woman applied and did extremely well on her first interview. She had the right experience, the right skills, and by all accounts, she did everything right — until she agreed to a background check.

Pam Haubrich, co-owner of Ferndale Family Dental, said the applicant was in the final stages of the new-hire process, when the background check came back with a big surprise: The woman had pending criminal charges for burglary, forgery and possession of a controlled substance.

“Apparently she had stolen the prescription forms from her previous employer,” Haubrich said. “When we confronted her, she denied everything and said her cousin had stolen her identity. The sad thing is we probably would have even given her a chance if she had owned up to it.”

Haubrich said background checks are extremely important to her business because in the medical field, most problems fall back on the doctor.

“People can say anything,” Haubrich said. “[Pre-employment screenings] just give us some added security, peace of mind and some insurance for our patients.”

For most employers and landlords, background screenings are essential to creating a snapshot image of the risk an individual poses to their property or business reputation.

For businesses, employers need to be able to trust the employees who are driving company vehicles, going inside a customer’s home or handling cash, while property owners need to know if prospective tenants will pay on-time and not trash their house.

Dianne Bass, owner of AccuSearch, conducted the background checks for Ferndale Family Dental and said the results really made an impact on that office. Bass said both pre-employment background checks and tenant screenings, which are very similar processes, are simple ways to ensure a worry-free relationship with the employee or tenant.

“It is a step that within 24 hours can save you a lot of heartache and a lot of money,” Bass said.

‘It’s luck of the draw’

Guy Seeklus, president of E-Renter USA, which also does business as Criminal Data, said in simple terms, conducting background checks and tenant screenings is all about risk management.

“If you are the type that goes to Vegas and you are willing to put it all down on the table on one spin of the roulette wheel, then you don’t need this kind of thing,” Seeklus said.

He said if a landlord or an employer doesn’t poke into an applicant’s past, they are exposing themselves to a greater risk.

“If you don’t screen an applicant, it’s luck of the draw,” he said. “All day long, we hear some really bad horror stories. I mean every single day, it’s something new.”

Seeklus said in business, one can’t afford to judge a book by its cover.

“For example, some people think they don’t have to screen an applicant, because they will just look them in the eye,” Seeklus said. “Well, would you give a stranger the keys to your car, if they promised to bring it back? No. So why would people be so quick to hand over the keys to their house?”

Seeklus said business is all about minimizing risk.

“First, you think about the worst-case scenarios and then you try to mitigate that risk and manage it,” he said.

For example, Seeklus said a plumbing company has to send its employees into homes and schools and they often drive company vehicles.

“If you think about the worst-case scenarios, some pretty bad things could happen there,” he said. “It’s not just the lawsuit issue either. It’s also the risk of damage to your reputation.”

Legalized gossip

Bass said, in her experience, everyone makes mistakes and we all have skeletons in our closet.

“Some are just more important to know than others,” she said. “If they said they had a degree from a college and it turns out they don’t — that’s pretty darn big. But if they are just fudging some dates to make it look like they had steady employment and fill in some gaps, that’s a bit more understandable.”

Once, Bass said, she worked on an application where the applicant had recently moved to Whatcom County from California and he wrote that the owner at his previous job had died.

“He thought that if he put down that the owner died that we would just leave it at that, but that was not the case,” she said.

As she dug deeper, she found that the owner had not died, but the applicant had stolen approximately $140,000 from the company by collecting deposits on bids and then not turning them over to the company.

“He was on the run from California,” she said with a satisfied laugh.

Unfortunately, Bass said, background checks are limited to what people put on their applications as a starting point.

“There is not some big database that has everyone’s work history where you can just type in their name and Social Security number to see what they have done their entire life,” she said. “Unfortunately, that does not exist as far as I know.”

Instead, they troll court records, credit reports and job histories to see if things match up. If it is a tenant screening, they will look at past evictions and rental history.

“We match addresses, so we can see that maybe they said they worked in Oregon but their credit report reflects they were in South Carolina,” Bass said.

Bass said she has been in the background business for the past 13 years and still loves it.

“To me, it is kind of like legalized gossip,” she said. “You get the dirt and then you get to tell someone else about it.”

Sign of the times

As the recession wears on, both Bass and Seeklus said pre-employment background checks and tenant screenings are being affected by the swelling unemployment numbers and a crumbling housing market, respectively.

Bass said more people on the job market, means fierce competition and employers need to be more vigilant than ever.

“With the work pool that is out there right now, everyone is going to be fighting for jobs and trying to make themselves look just a bit better than the next guy, so there is a little bit of embellishment that might be going on,” Bass said.

She said that while some people make honest mistakes on applications, all that glitters is not gold.

“Basically, if they look too good to be true, they probably are,” she said.

Seeklus said as the housing market has worsened and forced hundreds of thousands of homes into foreclosure, he is seeing a new trend in tenant screening.

While his company is used to doing a tenant screening on an applicant, Seeklus is seeing more requests to screen the property owner to make sure the property is not in foreclosure.

For example, if a tenant with homeowner’s insurance loses his home to fire, the insurance company would pay for the tenant to live elsewhere, most likely in a house because it is cheaper over the long term. There is a risk to the tenant, however, if they have to prepay for the new house.

“What we have seen is that they will put someone into a house and prepay for six months or a year and then six weeks later, the home might be in foreclosure,” Seeklus said. “Isn’t that crazy? It’s a total sign of the times.”