Utilising background checks to avoid employee fraud

Employee fraud can have devastating consequences for a business and as concern over disgruntled employees committing fraud rises in 2011, employers are looking for different ways in which to combat internal fraud. Current economic conditions prevailing in 2011 could have a severe and negative impact on employee morale – which is one of the main contributors to increasing incidences of employee fraud. Corporate SA is losing an estimated R150 billion annually to insider fraud, according to Steven Powell head of forensics at law firm Edward Nathan Sonnenbergs.

The volume of background checks carried out by EMPS increased by 18 per cent in 2010, despite an obvious slowdown in recruitment, demonstrating a tightening-up in employee screening. While it is crucial to deal with this issue in the recruitment process, to truly safeguard against insider fraud HR needs to maintain an element of screening throughout the employment contract.



Are Social Media Employment Background Checks Legal

FTC and Social Media Employment Background Checks

When it comes to social media employment background checks, the Federal Trade Commission (FTC) has indicated that it plans to hold employers gaining information about potential employees over the internet subject to the same accountability as employers who obtain information about prospective employees in more traditional ways.

This means, among other laws and regulations, that social media employment background checks must comply with the Fair Credit Reporting Act (FCRA).

As the consumer protection branch of the federal government, the FTC works in part to protect the privacy and reputation value inherent in people’s names. This protection has extended to the FTC enforcing regulations whereby employers must do diligent research into the accuracy of data provided to them about potential future employees.




Mat Honan

Your next job application could require a social media background check. Odds are, you have no clue what that means. Nobody does. It’s new and scary and probably scours the Web for pictures of you puking on the beach.

But screw speculation. We wanted to know. So we ran background checks on six Gizmodo employees. Here’s what we found, and why you should both freak out about and embrace it.



Fraudulent Education and Employment Claims Increase Background Background Checks

By Gordon Basichis

Fraudulent claims from international employment candidates, especially from China, have necessitated an increased in employment and education verification background checks for employers looking to recruit applicants from these regions.   Many employment screening services have reported that the growing problem of academic and work qualification fraud in China has lead to increased business from background checking agencies.

For a long time international candidates made fraudulent claims and for the most part they went uncontested. Staffing agencies and employers for a long time accepted the information on CV’s and resumes pretty much at face value.  But no longer.




Education verification is an important part of your general employee background check. If you believe that this has lesser importance than a criminal background check, consider the case of Laura Callahan who resigned as Director of the Department of Homeland Security in 2004.

It was established that Laura Callahan’s doctorate was obtained from Hamilton University, a known ‘diploma mill’. That is a so-called educational establishment that offers diplomas and doctorates to students after little or no study. Subsequent investigation discovered that a minimum of 28 other senior employees had obtained their qualifications from diploma mills. In other words, they were not suitably qualified for the jobs they were holding.


Diploma mills are commonplace, and Columbia State University, for example was shut down in 1998 after an advertising campaign offering degrees within 27 days! That was another diploma mill, and that is one of the reasons for education verification being so important.

The requirement for qualification has become very widespread, and it is little wonder that so many job applicants are tempted to at least overstate their qualifications if not downright lie. Most company positions now require an education qualification of some form or another, and if you search for ‘fake degrees’ on Google you will find several pages offering them. It’s a problem.

The temptation to provide false educational credentials is overwhelming since the rewards for success in fooling your potential employer can be high. The General Accounting Office reported in 2004 that up to 200,000 federal employees had falsified their resumes. These are the ones that were detected. How many more are there that were not detected, and how many in all occupations are involved, not just federal employees? So do not think that you are immune to this; you probably already have employees on your payroll that have falsified their resumes.

This is a serious problem, and a breach of faith on the part of the employees who do this, especially where the knowledge provided in studying for a degree is necessary in the job, and its absence could affect all of the other employees in the company. It is also a serious error on the part of the employers who offer them employment without carrying out suitable education verification.

As more and more qualifications, diplomas and degrees are requested for more and more jobs where previously they were not required, education verification becomes increasingly important. Candidates are highly motivated to provide degrees, obtained by whatever means they can, and up to 20% of employers in the USA now require verification of diplomas and degrees from the college or university that awarded them.

Some universities offer an online verification service that involves providing the student with a password that they can pass on to a prospective employer. This provides the employer with a portal into the student’s records that confirm the qualification awarded. Although this does not address the problem of diploma mills, it at least provides some security. A list of accredited educational facilities would help reduce the need for full education verification and the issue of not knowing what is and is not a diploma mill.

Diploma mills may be breaking the law if they offer these diplomas to students in the knowledge that are being used for job applications, and the applicant is committing a criminal offense in many jurisdictions by presenting them. A federal law is required on this issue, and that would possibly help employers with this problem.

In the meantime, employers must not overlook education verification when carrying out employment background checks. It is easy to omit this essential factor of employee screening, but the employment of an unqualified nurse or doctor can be just as damaging as that of a shop floor employee with a record of violence. The cost to the employer could ultimately be considerably higher.

It should not be assumed that any qualification is genuine, and if a specific diploma or degree is required for a job, it should be verified that the candidate does indeed possess that, and that it has been awarded from a recognized educational or training establishment.

Education verification should be included in the employee screening that all companies should carry out, preferably by hiring a professional investigator to carry it out. It is too important and skilled a job to try yourself unless you have employees trained in how to carry out background checks, and the penalties for failure can be very high.

Source: andreaweckerlecopywriting

by Muhammad Saad Khan

When we talk about quality employment and best employee, then the first thing which came up in any employer’s mind is that their incumbent would be highly qualified and his qualification is legitimate.

Legitimacy of education is becoming a very intense issue these days as there are many people trying to get their credentials faked out to get their desired job. As the recession hit all around the globe and the job market is so scarce, and the qualified employee needs are so high, so many people are using bad means to get their education.

There are number of diploma mills and degree mills, offline and online which are providing the best criminal services to the people and making money like never before. They are actually selling fake degrees, diplomas and certifications. Which have no worth as now every single employer is running a comprehensive education background check to vet their education authenticity.

Verifying the education credentials of a potential candidate can be an important part in identifying if they have the suitable skills set for the position. Educational success reveals a great deal about an applicant’s credentials and motivations; and through education background checks, an employer can get an accurate depiction of their qualifications.

Many employers view particular educational qualifications as a key factor in seeking new employees. Moreover, education is a prerequisite for many positions because it ensures applicable knowledge of a subject matter, or more importantly, a required license for the position.

Studies show that approximately 30% of all applicants puff up information about their educational background, ranging from made‐up degrees from legitimate schools to insignificant degrees from diploma mills.

In 2004, the general Accounting Office revealed that nearly 200,000 federal employees had at the very least exaggerated education credentials on their resume.

SHRM(Society for Human Resource Management): More than 53% of job applicants falsify information on their resumes; one in four candidates misrepresents his educational attainment.

ADP Hiring Index: 49% of employment, education and or credential reference checks reveal discrepancies in the applicant’s information.

Association of Certified Fraud Examiners: 41% of applicants lie about their education.

The above trend indicates an increase in the likelihood that employer’s who don’t verify education will hire unqualified personnel. Hiring unqualified personnel, in turn, leads to higher employee turnover, forcing the organization to incur expensive recruiting and replacement costs.

Online Degree Scams: Diploma Mills and Fake Degrees

It has also become exceedingly easy to access an authentic looking, knock‐off diploma from any school in America; all you need is a credit card and a computer. Diploma mills and degree mills as well as various websites, advertise very realistic, physical diplomas and transcripts, which have been found to deceive many employers.

Therefore, with the striking statistics of resume fraud, employers should think twice about using physical diplomas as proper evidence of a degree. Because the requirement for education qualification has become so demanding, education fraud is becoming more prevalent, as are the establishments of diploma mills.

Consequently, in order to combat education fraud, laws have recently been passed in which companies who manufacture fake degrees and diplomas are considered to have committed a Misdemeanor, unless the degree explicitly states, “for novelty purposes only.”

Current Systems of Education Background Checks and Degree/ Diploma Verification and Why They Are Not Enough!

  • At present, human resource departments in companies directly contact the concerned educational institution and undertake verification. This is no longer a viable solution, considering the increase in the number of recruitments, and the time taken for verification. This is also not a fool proof method.
  • A second method, often adopted by many of the larger corporations, is to outsource their employment verifications to background screening companies, who maintain large personnel databases.
  • The third system which has developed recently in education background checks is the system of online degree and diploma verification. There is a database of fake colleges and universities and as well as the misdemeanors who faked their documents in past. It is now the best free online resource for the employers as well as for the students, who can check their institutions as well.

The biggest issue with targeting these diploma mills is that they frequently move around. Many diploma mills are constantly changing their names while others are sprouting up sporadically. There are currently hundreds of diploma mills on the internet that offer fake degrees and diplomas.

When posing as legitimate institutions, diploma mills will use catchy phrases to attract potential buyers:

• Here is an opportunity to get ahead

• University diplomas

• Obtain a prosperous future, money earning power, and the admiration of all

• Diplomas from a prestigious university

• Based upon your present knowledge and life experience

• No required tests, classes, books or interview

• Bachelors, masters, MBA, and doctorate (PhD) diplomas available in your field of choice

• No one is turned down

• Confidentiality assured. Call now to receive your diploma within days

• Furthermore, these “schools” have no faculty, no classes, and no course catalog and only have one address or email in which they can be contacted.

Concluding Remarks:

  • Falsified education credentials have become a serious issue in the workforce; it breaches the faith on employees who are involved, especially when it can directly affect other employees and the company as a whole. It is also a serious blunder on the part of the employer who should have done proper education background checks; a mistake that could essentially hinder their current position.
  • Now that up to 20% of employers in America require a diploma or degree from a college or university that awarded it to them, education background checks have become exceptionally crucial.
  • Although a federal law has been implemented to target diploma mills that give out phony diplomas, the problem still exists and is far from being corrected. In the meantime, employers should remain steadfast about conducting pre‐employment background checks that include verifying academic credentials.
  • The online diploma/degree mill checking systems are significant source of help to the employers looking for easy and free of cost education background check.
  • Education background checks should be included in every pre‐employment screening process.




by Syed Faiez Hussain

There is such a lot of talk around about social media background checks, where employers check your profile out on Facebook, Twitter, LinkedIn and the like. But how many do, and how seriously do they take the information they can access, and more to the point, what are they actually looking for?

We were curious so we asked a few questions of a number of employers we interviewed. Here’s what they said:

Employer 1

Q: Do you check people out on social media and what do you think when you do?

A: “This is the big mistake of the younger generation. Everything is fair game and they need to learn that if I saw behavior that I felt didn’t fit with the team, or I discovered things about them that reflected negatively on their employer, or there is a pattern of behaviour that’s likely to lead to work performance issues, then they won’t be getting the job. People should assume that I am checking them out.”

Employer 2

Q: As part of your hiring procedure, do you routinely check people out on MySpace or Facebook?

A: No we don’t check

Q What if you became aware of something that was compromising an employee on a public forum?

A: “If it was a public facing position then we would have to talk to them about it because undoubtedly it could be seen publicly. To a degree what people get up to in their own time is up to them, but when that private persona interferes with that corporate requirement then there has to be an intervention, especially if they are representing the company as part of that corporate persona. Fundamentally I don’t really care. Can they do their job? Are they able to do their job? Will they do the job? Are they in a compromising position? If they are not part of the public face (or they are not seen as representing) the company, then I don’t have a problem with it.”

Q: Do you check people out on social media and what do you think when you do?

Employer 3

A: “I wouldn’t want an employee’s personal life to be reflecting on the business, especially because we are a public company. For me it’s about having the right appearance….We check potential employees on Facebook etc. It’s really important people be aware of this because the internet is so powerful.”

Employer 4

A: “We don’t do those sorts of checks. If something came to my attention of course we would look at it. Then I think you would be bound to take those things into consideration, generally however I think these are a social tool, not a business tool.”

Employer 5

A: “No I have never thought of it, I will normally, depending how long they have been in their previous employment, ring up three of their previous employers.”

Employer 6

Q: What would you do if you found something negative about an employee on social media?

A: “I would put it on the table in front of them and ask them about it. You would at least give this person the opportunity to explain. We haven’t been checking these forums as a matter of course, but we are doing in more often, particularly with contractors or recruitment consultants.”

So what’s the point I am trying to make here? Yes you will be checked out.

Always assume that anyone checking you out is making a subjective judgment– what some people thinks fits with the team, others may think is bad form.

Always assume that whoever is checking as part of a reference check will only have a partial picture of what you’ve been up to, good or bad. They will never know the context until they meet you, and depending what it is, they may not even be able to question you about what they saw to raise their eye-brows.

While by law employers are not able to discriminate, how would you know if you missed out on a job based on something they personally didn’t like?

You could liken this stuff to simple reference checking, but it is reference checking on steroids, given that employers can gather a lot more personal information than they’d ever be able to ask a referee.

On Thomas Shaw’s blog recently, he posted information about an application that will allow you to click to allow employers and recruiters access to your LinkedIn and Facebook profiles. You could soon find them soon on careers sites.

One click is all simple and convenient, but when friends can do things like post unflattering photos of you on the wild night of your high school break up, would you really want your Facebook profile to be your resume?

Source: Interview IQ



by Syed Faiez Hussain

While employers have long conducted education verification checks on their employment candidates, it appears that increasingly more staffing and recruiting groups are being made responsible for conducting this and other background checks as part of the employment screening process.
Education history, of course, outside of criminal records, is one of the more significant searches. For many positions, education is not just a prerequisite but also vital to employment candidate’s incumbent skill sets and the legitimacy they bring to the job. Those employment recruits who claim to but who do not possess the required skills can cause untold embarrassment to employer or recruiter alike. Both can lose clients over it, and in the extreme cases incur law suits.

Most notable, if a candidate lies, chances are he is lying about his education. With employment history, a fair number of applicants will exaggerate their role at a job or otherwise stretch the truth. But seldom do they out and out lie about working for an employer. This is not so much the case with education histories. Here is where the employment candidate will attempt to magically transform his two years of college into a full blown Bachelor’s Degree. Or in some cases, they never set foot inside the school.

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I have often wondered why the candidate decides to select the school he has never been to. Did he like the football team? The debating club? The school colors? Or was it a large university with high levels of enrollment and he thought any degree verification efforts would somehow get lost in the shuffle? But then sometimes they speak a smaller school, an ivy shrouded liberal arts college in New England or somewhere, where they might think no one would bother searching. It’s hard to say what goes on in their minds, but I have considered the implications of the schools they select.

To be sure, most employment candidates do not lie about having their college degrees. the overwhelming majority in fact are reputable and honest when it comes to claiming their certifications and degrees. Verifying education with most recruits is a fairly simple and straightforward process. Once we get from the client the type of degree the candidate has obtained, the name of the school, the location of the school, type of degree, major and year of graduation, the rest is pretty simple. Either we obtain verification from the school registrar’s office, the name and position of the verifying party, or we get it from the third party databases. All fine and valid.

There are exceptions. But for the most part, again, these are honest mistakes or simple oversights that are easily rectified. With common names, sometimes the degree is not enough. The researcher may require the major and the actual campus of the college or university. The campus is always important as most colleges and universities, despite the myriad branches, do not centralize their databases. The records for graduates and post-graduate degrees are housed with the registrar of that particular campus.

The wrong graduation date can cause confusion when conducting an education verification background search. With the wrong graduation date, it is sometimes difficult to find the student in the database. In some cases, and good to remember, those applicants who are lying about actually graduating from that college or university, will provide a fictitious graduation date. By doing so they try to hide the fact that they were “enrollment only” or never attended at all. So often we need to verify the graduation date.

Female graduates often go to school under their maiden names and then, years later, forget and provide only their married name. Time can be wasted searching for your candidate under her married name, when she attended school under her maiden name. When you as a recruiter or human resources executive are trying to get someone hired, this can cause delays. So it is always best to find out up front if her current name is the same name she used while attending the college or university.

With international students attending domestic colleges, there is a similar condition as with female college graduates. Often a foreign student went to school under a formal, native name. And then, over time, they”Americanize,” their names. Bao Wynn Nguyen is now Ben or Frank. His recent colleagues, the recruiter and most others now know him as Ben or Frank. But the school still has him records with his native name. When we are unable to verify, initially, it is necessary to go back to the candidate and ask if what name he or she used to register as a student. Again, this can cause delays in the hiring process.

Be aware of diploma mills. Diploma Mills have increased in prominence over the years. Those who run diploma mills, usually have several schools all running out of the same physical location. Often they are located for tax and legal purposes offshore. When conducting our research we find them in places like Gibraltar or the Seychelles.

Diploma Mills are the easy and spurious way to a higher education. This is where the employment candidate has spend all of a couple hundred bucks and twenty minutes, sometimes, in qualifying as a graduate from some mythical Internet School under the guise of “life experience.” Diploma mills often have them high falutin’ names that can sound like real schools. Often the name of the school is selected so you will associate the “graduate” with a prestigious university. They are not. They are not legitimate remote or distance learning institutions. They are bogus, unaccredited by anyone other than themselves, and the degree is worthless.

Examples of the diploma mill versus the actual college or university are, The University of Cambridge, a highly prestigious university in the U.K. and Cambridge State University that operated out of Louisiana and Mississippi until the Louisiana Attorney General had it closed down back in the nineties. Another is the University of Canterbury, an acclaimed and accredited New Zealand University, and our old buddy, and the fully unaccredited Canterbury University, which shows up from time to time on a candidate’s resume. Canterbury University claims to operate out of the United Kingdom, but its offices have been traced back to you guess it, The Seychelles.

Sometimes, when all else fails, it is incumbent upon the employment candidate to supply a copy or his or her degree or transcripts. We request this when the registrar is unable to locate the student in its database. Sometimes it’s a technical glitch, sometimes it’s an oversight on the part of the registrar.

If the candidate produces his college degree, you cannot accept it a face value. A common joke around our office is bogus diplomas is but one more reason G-d invented Photoshop. Or in the case fo diploma mills versus versus an actual university, the college crest just ain’t the same. There are variations, notable differences in both the crest and the proverbial paper it is written on. Another key is to examine carefully the officiating personnel who are listed or who have signed off on the graduation diploma.

We had a recent case where the university could not find the candidate’s graduation records for love nor money. We requested from our client a copy of the candidate’s diploma. Sure enough, here it came. At first glance it looked authentic enough. But upon further review, something was askew.

The diploma was real enough, only the candidate graduated eleven years before that college president had taken office. The candidate had apparently taken someone’s legitimate diploma, swapped out on Photoshop that name for his own and then presented the diploma. An oversight on the part of the candidate and a serious mistake. When we reported our discovery to our client, she immediately invalidated the candidate for any further consideration.

We also get a lot of shuck and jive when we request a copy of the diploma or transcriptional. I can’t find it. It’s not here but with my parents. My dog ate it. Whatever. Sometimes what the candidate claims is true, and most of the the time…well, it’s tough to be caught in a lie. When it comes to explanations and excuses, we have heard quite a few. Some are even pretty creative. One chestnut was the lament, “The school just can’t get it’s s**t together.”

Too rare. So be careful when recruiting. With degrees that have been verified by the school registrar or through the third party databases, you can move forward with your candidate. But when the glitches show up, either resolve them by reviewing the candidate’s name while attending school, major, year of graduation, and, if necessary, a copy of degree. If this method fails to find resolution, then you may have a problem on your hands. Red flags are what they are and while everyone wants to get their person hired, there are few things more embarrassing than your client discovering your candidate had lied.

Source: Recruiting Blogs


by Muhammad Saad Khan

Employers and organizations, from the small businesses to the corporate giants, knows the benefits of hiring the best people and providing a safe, secure and healthy workplace, both physically and financially, for their employees, customers, shareholders, and the community in which they operate.

It’s important to know about the people before hiring. A new prospective employee is an important responsibility for any organization. An employer who has comprehensively performed a thorough pre employment screening on candidates is able to bring into the organization a highly capable person who will prove to be a tremendous asset in the future.


Regrettably, some organizations don’t take pre employment screening as a mandatory chunk of hiring process, and in result they runs with the risk of exposing their organization to someone who could ultimately become the organization’s greatest danger.

There are three basic reasons which elaborate that “why the pre employment screening process is extremely essential for an employer”.

1. To make the best hiring decision

2. Providing the safe working environment

3. Elimination of legal risks and liabilities

To Make the Best Hiring Decision, Employment Pre Screening is a Must!

It has been said that some applicants will only tell you what you want to hear. Most of the transgressions found in the forged resumes are basically in three categories: Education, Job titles, and dates of employment. By thoroughly verifying information given by an applicant, a company can improve the chances of hiring an individual who has portrayed his or her background, experience, and skills honestly and accurately. Using pre employment pre screening to verify an applicant’s history helps employers make decisions based upon facts.

Providing the Safe Working Environment Is a Primary Goal of an Employer

Acquiring and maintaining the safe working place for the employees is the dream of any employer or any organization. It’s obligatory for the employer to maintain work premises which is free of violence, fraud, theft, sexual and other types of harassment. The financial cost from these problems can be enormous. Additionally, there are other costs that are hard to measure, such as the harm to employee morale or the reputation of the organization. So it’s essential to run a pre employment background check to deter the criminals entering your heaven organization.

Legal Risks and Liabilities Are Extremely Harmful

Legal risks and liabilities is the threatening factor which is directly interconnected with the above two reasons of pre employment screening. The employers are responsible for the safety of employees, customers and anyone who enters the workplace. So its usual that there a risks and liabilities in hiring a wrong employee which can not only results into a trouble for the company but also for the business of the company. So to avoid such losses and risks, every employer must perform an effective pre employment background screening assessment to define the integrity and repute of a company.


The pre-employment background screening process can assist an employer in the hiring of qualified applicants, while simultaneously reducing turnover, deterring fraud, and avoiding litigation. As the job applicants vary widely in their knowledge, skills, abilities, interests, work styles, and other personal characteristics so these differences systematically affect the way people perform or behave on the job. Comprehensive pre employment screening process is able to collect accurate information on job-relevant characteristics that are not often recognized by simply observing the applicant. And most importantly these pre employment background checks can help in minimizing the chances of potential legal vulnerabilities. Thus the information helps assess the fit or match between people and jobs and has proven to have a significant return on investment for employers.



Millennials Could Dictate the Future of Employment Screening

As the reins change hands from Generation X to Millennials over the next 20 years, the work force will be replaced by tech savvy security managers looking for fast, convenient, and portable solutions to employee background checks. The future of preemployment screening is mobile availability, according to Marc Malloy, vice president of HireRight, Inc., the world’s largest background screening software company.

In the future, “the way background checks are ordered, how they’re studied, and how these reports are made, all of these things are going to be on an entirely different platform,” Maloy said in a presentation on the future of preemployment screening earlier today (June 9, 2011) during the monthly ASIS International Information Asset Protection Council and the Privacy and Personnel Information Management Council meeting.

Background information on potential employees is still received by fax or mail, Malloy said, but the demand for digital will only increase over time as managers of the future seek to lessen the time between hiring employees and having them start work.

He also addressed the topic of screening social media profiles of potential employees. Recent statistics show that with the help of Millennials, social media have replaced e-mail as the leading form of communication online; surprisingly, however, Malloy said the demand for social media searches on potential employees is low.

“We don’t believe social network screening is ready, from a maturity standpoint, for businesses to consider that in background screening, but we know they do it anyway,” he said. “[Employers] that do it are looking for drug, violence, or sexual references, “ he said.

There are legal considerations specific to social media, however.

Social media profiles can provide another look at a potential employee, but rejecting potential applicants or new employees because of content on a social media profile is still a gray area and opens a company up for discrimination lawsuits or other types of laws, such as claims of violations of privacy rights. (For more on this, see “How to Avoid Hiring Mishaps” by Lester S. Rosen, Security Management, May 2009.)

Maloy said he only knows of one company that searches social media sites as part of a preemployment background check.

That company is Social Intelligence. On its Web site, it refers to social media searches as a catch-22 situation. “If employers ‘Google’ job candidates, then employers are vulnerable to discrimination charges and job candidates are vulnerable to discrimination. If employers don’t Google job candidates, then employers are vulnerable to litigation due to negligent hire and job candidates are unrecognized for assets, achievements, and contributions,” they present on their homepage.

Social Intelligence said they protect both the employer and the employee by only searching for employer-defined objectionable material. They also provide a service that tracks the public online activity of existing employees. (Security Management has noted that experts warn against looking at social information placed behind a wall for authorized viewers only.)

Other companies are taking it slow. “We’re not super comfortable with it,” Maloy told those listening in to the conference call. “Once there’s one or two cases that set a precedent, then we’ll build a product.”