When it comes to hiring or approving other types of applicants, the stakes are high. The quality and compliance of your background screening process directly impact your organization’s risk, reputation, and legal standing. Yet not all background screening providers are created equal—despite what they may promise.
In a market filled with fast, low-cost options and promises, it is critical to understand what separates a truly reliable, compliant screening partner from one that could expose your company to significant liabilities.
Not All Screening Firms Follow the Same Rules
Some online services claim to offer comprehensive and quick and inexpensive background checks—but closer inspection often reveals a different story. Many of these companies include disclaimers (often in fine print at the bottom of their homepages) stating that they are not Consumer Reporting Agencies (CRAs) and are not governed by the Fair Credit Reporting Act (FCRA). This means they are not held to the same legal standards as regulated providers. If a manager relies on these non-compliant services to make hiring decisions (e.g., approving applicants – such as employees, tenants, members or franchisees) – they could unknowingly violate federal or state laws, leading to:
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Legal action from candidates
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Exposure to class action lawsuits
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Reputational damage
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Regulatory scrutiny
In short, saving a few dollars upfront can result in significant costs and complications later.
Compliance Is Complex—and Constantly Changing
Background screening is governed by a mix of federal, state, and local laws—many of which evolve regularly. For example:
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California prohibits reporting of criminal convictions more than seven years old and restricts the use of expunged or sealed records.
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New York, Illinois, and other states have specific requirements around notice, consent, and adverse action.
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Some jurisdictions ban the use of certain records entirely, depending on the position or industry.
Navigating this legal landscape requires more than a database search. It requires up-to-date expertise, a thorough understanding of compliance obligations, and a process that can adapt as legislation changes. Using Google searches or online sources as part of a background check process is not compliant and poses serious risks. The information found through these methods is often unverified and can easily be linked to the wrong individual—especially when multiple people share the same name. Additionally, such sources may include expunged or sealed records, which are legally prohibited from being reported, or other unreportable data such as arrests without convictions. Relying on this type of information can expose your organization to significant legal liability and reputational harm, making it a high-risk approach to screening.
What to Look for in a Background Screening Provider
Choosing a reputable screening firm isn’t just about results—it is about trust, process, and protection. Here are key factors to consider:
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Are they a registered Consumer Reporting Agency (CRA)?
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Do they follow FCRA and all applicable state/local laws?
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Do they source data directly from official court records, rather than relying solely on aggregated databases?
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Do they provide guidance on compliance, including adverse action procedures?
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Do they monitor legal changes and help clients adjust accordingly?
The right partner will not only help you uncover relevant information but also help you use it legally and responsibly.
The Real Goal: Reducing Hiring and other Applicant Approval Risk, and Protecting Your Brand
At the end of the day, a background check should do more than check a box—it should reduce hiring risk, improve the applicant decision-making, and protect your organization. That only happens when you work with a firm that’s reliable, knowledgeable, and fully compliant with the laws that govern employment, membership, franchisee, tenant and other types of background screening.
Before choosing a provider, take a closer look at their credentials, process transparency, and legal alignment. A reliable background screening firm will not just tell you what you want to hear—they will ensure you are doing it the right way.
Rudy Troisi, L.P.I., Founder, CEO, Reliable Background Screening and Dr. Alan Lasky, SVP Client Success & Partnerships.
This content is for informational purposes only and not legal advice or binding case law. Consult qualified legal counsel for assistance.
Copyright © 2025, Reliable Background Screening, a Division of Marcett, Inc. All rights reserved.
