The Importance of Background Checks: A Case Study

The world is changing. Borders are opening up. Workforces are crossing international boundaries. Barriers to global competition are lifting and technology is simplifying communication and allowing virtually anyone to enter the global job market. The only constant that remains in today’s hiring equation is people. Resume fraud is a widespread problem for employers in every industry and at any size company. It’s persistent and sometimes even careful examination of a resume won’t immediately reveal red flags or problems. The only way to properly vet job candidates is to screen them with a thorough pre-employment background checking process.

The result of not comprehensive background screening checks was recently described on CNBC, 2018, titled: “HR Confidential: I hired him without performing a background check. Then he stole his colleagues’ identities”. Let’s have a look at the case study.

“I was a senior HR manager at a foreign banking company. An employee came to my office and informed me that someone had stolen his identity and applied for credit cards in his name. I took down a report but didn’t think anything of it because I oversaw payroll and other sensitive information. It wasn’t out of the ordinary for employees to notify me about changes to their banking information or if their bank account had been compromised. That way, I could make sure there were no issues with their deposits. But a week later, another employee came to me with the same problem and my red flag went up. By the third employee, I knew something was happening. I realised we had an internal problem because it’s too coincidental for three employees to have identity theft within a three-week span. My staff and I tried to figure out what was going on but we were getting nowhere.

The solution

After a few weeks, we hired an investigative company that specialises in fraud. They came to my office and requested the name, photo and address of everyone who has ever touched our employee files and I gave them a list of 15 to 20 people. One week later, they came back with the postmaster general and postal police officers who were armed with guns. They sat down, placed the list in front of me, pointed to a name and asked, “Who’s this person?” I responded, “Oh, he’s a temp in our file room.” They said, “Bring him in.” I brought him into my office and the guy’s in handcuffs in less than five minutes. I couldn’t believe it. I was in shock. The guy was a temp employee who we had hired through an outside agency to work in our file room. When you have 3,000 employees, their personal files quickly pile up so we hired him to clean up each person’s file, add information to them and put them away. However, he was going into these files, taking people’s social security numbers and stealing all of their information. The post office already had the guy under investigation for other credit card fraud that was linked to a particular address. Therefore, when they saw his name on our list, they were able to easily nail him. When he came into my office, he initially denied that he was the culprit. However, he eventually admitted that his friend talked him into stealing his colleagues’ information. He and his friend were stupid enough to fraudulently sign up for credit cards and got them sent to their home address. That address was the one that the postmaster spotted on our list. For the employees who had their identity stolen, this was such a nightmare. It took some of them more than a year to get this solved. I also felt somewhat responsible because I’m the one who hired the temp and this happened under my watch. I did the best I could in providing support.

As a company, we did feel obligated to offer help and paid the service fees to help them clean up their records. I felt terrible. This went on for months for them. Luckily, they didn’t sue us or anything but it was a mess.

The lesson

The first lesson here is this: Quickly determine when something is outside of your element and know when it’s time to get help. Doing an investigation of employee theft was outside of my staff’s expertise. Even though it cost us about $5,000 to hire the investigative company, it saved us time that would otherwise have been wasted. You need to know when you’ve reached your limit and when to outsource things.

The second lesson is to always perform background checks for temp employees (just like you would for a full-time employee), especially if the person is handling sensitive information.”

At CRI Group™, our EmploySmart™ pre-employment background screening process analyses a job candidate’s claims and credentials and digs beyond the surface to make sure the facts match up. Our experts conduct extensive checks that examine all of the following details of a potential employee:

  • Employment History References
  • Credit and Bankruptcies Checks
  • Academic and Professional Qualifications
  • Prior Work Experience and Business Success/Failure Searches
  • Regulatory Registers, Compliance Databases and Regional Supplemental Searches
  • Sanction List and Criminal Record Searches
  • Identity and Good Conduct Certificate Validation
  • Directorship Search
  • Media and Social Network Search

Can you afford to let degrees and credentials go unchecked? Contact us today.


Source: CNBC, 2018, titled: “HR Confidential: I hired him without performing a background check. Then he stole his colleagues’ identities”,