The Covid Pandemic has affected the economy in disparate ways. One area that has seen steady growth is interest and membership in private clubs, be they country clubs, yacht clubs, golf clubs, investment clubs or an array of newly configured private clubs that are sprouting all over the country. The limited supply of open membership slots, coupled with the high demand for them has made membership background checks an increasingly important component of the membership application process.

Even with barriers to entry such as expensive initial membership fees — often in the multiples of five figures, with some initial fees that are even in excess of $100,000 — many private clubs have waiting lists that are a year or more. Private clubs are exclusive because they have high qualifying standards. However, it is not only the affluent who have wealth — criminals and terrorists also have an abundance of cash. Members join private clubs with an expectation of safety. Private clubs have an obligation to perform member (and employee) background checks, not only to protect their members but very importantly to mitigate their own negligence liability risks.

Fortunately, thorough membership background screening does not have to cost private clubs anything. The average cost of a “best-practices” member background check can easily be incorporated into the initial membership fee or can be passed through as a separate application fee or background check fee. Additionally, members will perceive this as an added benefit to joining your private club, knowing that the club takes not only the exclusivity of the club seriously but also their own personal safety. This generates “peace of mind” to all members, knowing that future member candidates will be vetted as well.

Member background checks not only mitigate risks and potential liability for private clubs, they also will lower insurance costs for the club. It is important to note, however, that you often need to proactively inform your insurance agent that your club is performing member background checks, in order to obtain an insurance discount (the same discount process is true with employee screening).  

Unfortunately, background checks are not all created equally, and not all background screening companies are capable of performing member background checks.  Some background screening companies are only authorized to perform employee screening credit reports, not membership credit checks. Thus, they use their employee screening credit bureau account to obtain a member background check credit report. This puts both the private club and the background screening company in violation of the Fair Credit Reporting Act (FCRA – the federal law that governs all consumer background check reports).

When seeking out a reliable background screening company for your private club’s member background checks, your checklist should include the following for the background screening company:

  • Are they a consumer reporting agency (CRA), meaning they understand the FCRA and will assist your private club with providing proper consumer authorizations and disclosure forms
  • Are they authorized to obtain member background check credit reports (not just employment credit reports)
  • Do they provide “soft-pull” credit options so that your member candidates do not have their credit scores getting “dinged”
  • Can they access criminal records from every county throughout the nation. County criminal record searches are essential, as no criminal database exists that covers the entire United States
  • Are international background checks available for any international member applicants that may want access to your private club

Your private club has worked hard to build its brand and its exclusivity. Performing “best-practices” thorough member background checks will help protect your members and your club, and the best news is that when done properly, the cost is paid for by your member applicants.

 

Posted by: Rudy Troisi, L.P.I., President and CEO, Reliable Background Screening

Copyright ©️️ 2021, Reliable Background Screening, a Division of Marcett, Inc. All rights reserved.