Checking Credit Under Fire

It is known that retailers acrosss the country lose more than $30 billion a year because of employee theft. Workplace violence costs employers over $55 million a year in lost wages. A whopping third of all employees provide bogus information on their resumes.

It is statistics like these that have raised the number of employers requiring background checks on the new hires.

However, there has been no evidence showing that people with weak credit are more likely to be bad employees or to steal from the bosses.

Eric Rosenberg of the TransUnion credit bureau admits, "at this point we don't have any research to show any statistical correlation between what's in somebody's credit report and their job performance or their likelihood to commit fraud."

Legislators in more than a dozen states have introduced bills to curb the use of credit checks during the hiring process, and as Liberty reported last week, three states have passed such laws.

"Bernie Madoff had a pretty good credit score," said Matthew Lesser, Connecticut state representative. "And yet there is this consistent message that if you have a bad credit score, there is something wrong with you."

However, credit bureaus believe that access to this crucial information is important for the business that wants to protect itself from catastrophic losses and should be used as a piece of the puzzles of an employees overall history, "not the absolute yes or no toggle switch."

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Massachusetts Unemployed will Continue to Receive Benefits

Tens of thousands of unemployed individuals nationwide are poised to lose their benefits. Congress failed to extend the benefits before breaking.

But because of a state law passed by the legislature last summer, the unemployed in Massachusetts will continue to receive benefits for a temporary amount of time. If congress fails to extend benefits, Mass. residents can expect to lose those benefits on May 2. Nearly 500,000 residents may be affected.

"The extensions we have advocated for are vital to assist people impacted by long-term unemployment," said Jo Anne F. Goldstein, Mass. Secretary of Labor and Workforce Development. "Our claimants needs the financial assistance to continue their job searches - whether for fuel of food or to pay bills. Extensions help people get through the trying period of seeking a new job."

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Missing Convictions, Why Database Searches are not Foolproof

It is always interesting to discuss what people do for a living. How we all come together from different walks of life and how each of participates in making the world work in it's strange and unique way.

I love being among a group of people that are casual acquaintances. Inevitably, the subject of profession arises. Pre-employment background investigations always receives a raised eyebrow or two, and the "wink" and elbow jab - "Don't pull my information! You don't want to know!"

I tend to think these types of comments are usually joking, however, one night a casual acquaintance had several probing questions for me. Turns out he was able to obtain a job though he had a felony level conviction on his record. He was probing me to find out how that could have happened,

"It's been so hard finding work since it happened, I know they did a background check, but I didn't disclose the information! And they didn't find it!"

The company probably ran a criminal "Database" search. Database searches are inexpensive, making them a great pre-screening tool. But more and more, especially as the economy continues to struggle, companies are relying solely on these searches to weed out former criminals.

But obviously, they're not catching everybody. Lucky for a few of the unemployed. When I asked my acquaintance the nature of his crime? Felony level fraud: Identity Theft.

He is currently employed at your local bank.

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The Unemployed to be Drug Tested in South Carolina

South Carolina's state capital is reading a bill that could affect some 150,000 South Carolinians receiving unemployment benefits. The bill would require a negative drug test to receive the benefits they need. Senator David Thomas proposed the bill, requiring anyone applying for the benefits to be tests and a then subject to random testing in the future.

South Carolina is headed into debt due to the large number of people receiving benefits in the state. Last year, they paid over $934 million in benefits to the unemployed and had to borrow from the federal government to make ends meet.

"They should not be expected to pay taxpayer money with this when that unemployment is being used for drug use," said Thomas. "It's actually meant to be helpful to these individuals perhaps if they are misusing drugs to say to them, nope, that's not what you should be doing with your money number one. Number two, if you're on drugs and you go to apply for work, don't you understand that you're going to be tested very likely in that place of employment and you're not gonna be able to get work?"

Other representatives fear such laws would push the drug users in the lives of crime, "When someone has no income and you'll see crime begin to elevate," said House Representative Leon Howard.

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Make Way for Fraud : Falsified Employment Letters

Kevin Sluga and his wife Leslie, owners of California Business Solutions cooperated with authorities and admitted under oath that they prepared employment verification letters containing false information. The letters allowed their son-in-law, realtor David Crisp, his wife, and their associates to purchase homes they could not otherwise afford.

The letters contained misstatements about the borrowers' employment and occupation. The letters allowed more than $12.6 million worth in homes to be purchase. The lenders themselves were defrauded out of nearly $4 million.

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Job Hunt, Don't Lose Your Identity

If you're one of the thousands of Americans on the prowl for a job, you should be aware, you are a target for a sophisticated and particularly cruel con artist.

Richmond, VA - The Office of Consumer Affairs reports 87 consumer complaints about the companies Virginia Personnel, Inc. and New Beginnings, Inc. Both companies fraudualently extracted identifying and personal information from the "applicants." Some of the tactics they used that you should be aware of:

• Job Guarantees - the old saying still goes, if it sounds too good to be true...
• They actually sold "Employment Information" and never advertised a job position.
• Do not include any identifying, personal information on your resume. No need to put your SSN number on that document.
• Provide only your email address until a position is formerly offered and a start state is set.

Lynn Oaks of TrustedID says, "Only share information that will allow them to contact you to have a follow-up conversation." Also, check out the company before agreeing to anything. See if they have a legitimate website, read online reviews.

Biggest tip offs that you're working with a scam artist:

• Job offer with no background check
• No face-to-face interview
• No reference check

Be careful out there!

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Bad Credit Makes for Terrible Prospects

While the economy is impacting everybody, there are some that are being dealt heavier blows than others. While struggling to pay overwhelming mortgage notes and all the bills that come in on a monthly basis, those hunting for jobs may find may doors shut on them due to bad credit, perpetuating a vicious cycle.

While there are no clear indicators that bad credit necessarily means you are not suited for the job, employers tend to overuse the credit report when making crucial hiring decisions. Unless the applicant will be handling money (cashiers, accountants, etc.) the credit report really has no bearing on the applicants ability.

The Fair Credit Reporting Act (FCRA) and state credit laws help to regulate how an employer can obtain and use their findings. An employer must gain your consent in writing to do a credit check and the report they receive is different than one viewed by a credit agency or an individual. Full account numbers are not revealed and they won’t see a credit score, but they will be able to see late payments, collections and bankruptcies. If you are actually denied employment because of your credit report, the company must notify you so that you may view the report on which the decision was based.

In the meantime, a House bill introduced last month would prohibit employers from using credit report details for their hiring decisions. The Equal Employment for All Act, if passed, will keep credit worthiness (with some exceptions for financial firms and government agencies) out of the employment process so that getting credit at work will make it more about performance than payments.

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Hiring Mistakes Cost Companies

A recent survey by Occupational Health and Safety outlines the trouble hiring mistakes can afford small to mid size companies. Three out of four employers say they've hired one employee they wish they hadn't. Twelve percent of those respondents say that hiring mistake alone cost them about $10,000!

"The businesses we talk to say they are seeing more individuals lying on their résumés or exaggerating their skill sets in order to get scarce jobs. In a down economy, small business owners must be especially vigilant when they bring on new employees," says SurePayroll President Michael Alter.

Most mistakes are being made by negligent or poor hiring decisions. Skipping crucial steps along the way during the hiring process cost these business big:

• "We hired an employee without doing a background check, and then I caught her stealing."
• "We rely mainly on a strong 'gut feeling' to determine if the candidate seems qualified and references check out."
• "Our hiring errors have been largely due to time constraints--we needed to fill a position fast and quickly chose what appeared to be the best applicant from resumes received."

"For small business owners, the psychological and economic strain of making a hiring mistake can be a massive burden on the company," Alter says. "What's more, these kinds of hiring mistakes can be reduced or avoided altogether by implementing proper precautionary measures. Investing in pre-employment screening services is worth the small upfront investment."

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Drug Tests for California Lawmakers?

That is what some are suggesting, though they will need to gather 430,000 signatures in 150 days to get the initiative on the floor for a vote.

"Drug testing and sobriety checkpoints? I can't walk a straight line because I have vertigo so I don't know if I would pass that test," said Assemblywoman Norma Torres, D-Ontario.

The ballot is about getting proof that the lawmakers are not on drugs or alcohol, and many site the financial difficulty the state has faced a good reason to keep track of the legislation.

"It certainly can appear like there's some serious substance abuse going on when you see some of these crazy votes," said Assemblyman Anthony Adams, R-Los Angeles.

The proposal is getting a few laughs around the Capitol, but testing for any intoxicated politicians won't solve California's low cash flow.

"I think what's going on in California is what is going on globally. It's the economy, stupid," Assemb. Torres said. "It really is."

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E-Verify Proposal Dropped from Stimulus Package

Stripped from the recently signed stimulus package, the E-Verify mandate would have required all employers using federally mandated funds to run their employees through the E-Verify program. Just before the bill was given to President Obama, the mandate was stripped.

E-Verify would have been an excellent assurance that jobs that are available are given to legal, authorized workers. In these hard times, it is hard to believe more protections for American jobs were not considered more seriously.

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E-Verify Measure up for Debate

As the negotiations for Obama's economic stimulus plan continue on Capital Hill, proponents of the E-Verify system are taking a stand.

E-Verify is a government program that checks a worker's immigration status against the Social Security Administration and the Department of Homeland Security. Immigration advocates believe using the E-Verify system lowers the rate of illegal immigrants becoming employed. Federally contracted workers, and several states across the nation, are already required to use E-Verify and face steep penalties if they are found to employ illegal workers.

The House version of the stimulus bill includes a provision for all companies or banks receiving funding from the federal government that requires them to participate in the E-Verify program.

But opponents of the provision insist that reporting errors from the SSA or Department of Homeland Security could result in thousands of wrongful terminations and essentially slow down the economy as a result.

However, proponents of the measure believe that any jobs available in the market should go to legal immigrants or American citizens, and using E-Verify will be a tool to insure that happens.

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Mortgage Loan Officers Face Stringent Background Checks

Tennessee Department of Financial Institutions began a new online program that allows mortgage companies and loan originators to apply for and manage their licenses electronically. Under the Secure and Fair Enforcement Mortgage Licensing Act of 2008, every state will have to participate in the program.

The program seems to make it easier to obtain and maintain a mortgage license, but starting January 1, 2009 fingerprint-based background checks also became a requirement for all new mortgage loan officer applicants. The managing principals for the companies in which the applicants work are also affected.

With so many fingers pointing at the mortgage lenders as the catalyst for the economic crisis we are facing, ensuring that they are the right person for the job.

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Drug Tests for Food Stamps

A new bill is set to take effect in the state of Texas in September 2009. The bill requires that all applicants undergo a mandatory drug test for food stamps. Any test that is returned positive for illegal substances or for un-prescribed prescription drugs will disqualify the candidate for food stamps, making them ineligible for 1 year.

As many more Americans are losing their jobs, there is good indication that there will be a rise in demand for food stamps. Using tax dollars to supply them, its nice to know that there will be some accountability for those who apply for them.

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Immigration and Obama

Immigration reform has been a hot topic for the past few years and government programs such as EVerify are working toward ensuring employers are able to remain in top form during audits by the government. As the economic crisis wages on, however, immigration and reform have been pushed to the back burner.

Our nation's capital is gearing up for an unprecedented inauguration for the first black president who promises of change have inspired millions, many questions are lingering in the air. His plate is fuller than any other president inaugurated before him and at the bottom of the piles lies immigration.

During his campaign days, Obama said, "we are a nation of law, as well as a nation of immigrants." His dedication to representing both sides of the issue is clear, what is not clear is how he will change or support policies that are already in place.

Until that unforeseeable time, employers should sit tight with laws already on the books:

• Verify. Complete I-9 employment verification forms for every employee hired after November 6, 1986. Periodic audits are advisable to ensure that the forms are properly completed and updated if necessary.

• Document. Document. Document. Ensure all reasonable and lawful efforts to resolve any employment verification issues are documented, such as a new hire's failure to produce documents within the first three days of work, receipt of social security mismatch letters, or confirmed reports of unauthorized workers. Employers must follow-up to resolve the issue within a reasonable time period, or the employee must be terminated.

• Follow for one, for all. Stick to the same employment verification policies and procedures for all employees, regardless of national origin or citizenship status.

• Keep tabs. Set reminders on priority dates for employees with pending permanent residency applications, and be on the lookout for H-1B filing dates subject to the quota.

• Sign-up for E-Verify. Consider participating in E-Verify to benefit from certain immigration programs, such as permitting employment of certain post-graduates for an increased period of employment authorization

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Embezzlement Strikes Again

Hired in June 2008 for Sherwood Inspection in South Windor, CT, Candace Brainard was a full-time thief. Already facing charges of embezzling $40,000 from her previous employer, Rocky Hill, Brainard was hired without a background check.

She proceeded to embezzle somewhere around $12,000 from Sherwood, which they learned about only after the police arrested Brainard. She now faces felony larceny and forgery charges.

"I had no idea. I wish I had," Sherwood said Friday. "Our losses are probably more than $12,000 because we've been uncovering more stuff. We're missing a $3,000 piece of equipment, which she said she sent out for testing. This is really hard on us."

In today's economic climate, of course it is. Business cannot afford to take losses like this. Employee theft is a widespread crime, costing US businesses nearly $1 trillion in losses in 2008. As the economy worsens, should employers have reason to believe they are more vulnerable?

"It may be on the increases in the next few months, but this crime is hard to detect quickly. Usually it's been going on for months of even years before a business realizes it," said Mary Rose Palmese, a veteran prosecutor in New Britain Superior Court. This type of theft is constant in good times or bad, and there is no clear indication so far during this recession of a spike in people embezzling from their employers.

Sherwood acknowledged he had not done a background check on Brainard. He learned of the alleged theft only after a courtesy call from a credit card about a suspicious check. "In the future everyone we hire is getting a background check."

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Clean Up Your Credit Report

Employers use credit reports to determine if their applicants are the right people for the job. A credit report is not just a reflection of how much you spend, it is reflection of your responsibility level and how much you can be trusted.

So, as the economic crisis rages on, more and more people are thinking about money and how it effects them. Cleaning up your credit report is a good New Year's resolution and here are some helpful tips to get yours in order:

First, get your credit report. Each year, you are entitled to receive one free from all three credit repositories: Transunion, Equifax and Experian. These reports will not actually contain your credit scores but they will give you a detailed analysis of all your active and inactive credit lines. This will help you to track what you've got left to pay off and ensure that you haven't been a victim of identity theft.

If you find an item which you which to contest, report it to the Credit Bureau immediately. If they find that the item you challenge is false or that it cannot be confirmed or denied, it will be removed immediately from your report. If they cannot confirm it, you have the right to submit a 100 word statement that will be included on your report.

Work toward getting your credit in good standing now. As the workforce tightens up for the long haul, you'll be one up on the rung toward getting, and keeping a better job.

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Ponzi Schemer Swindles $65 Million

With the recent allegations against Bernard Madoff who reputedly swindled investors out of $50 billion a smaller Ponzi artist, William "Boots" Del Biaggio has remained out of national media scrutiny. Del Biaggio duped investors out of about $65 million. The difference between these two high dollar scam artists is Del Biaggio had a background that should have alerted his venture debt firm, Sand Hill Capital, of his potential to commit fraud.

Ken Springer, former FBI agent who now runs Corporate Resolutions, investigated. "It's like history repeating itself. He had charges of fraudulent activity going back to 2003. You have to look at the track record, background and reputation.

After two civil suits in 2003 for fraud and breech of contract, a simple investigation into Del Biaggio's background would have revealed the man to be a bad risk. Springer said investors just didn't take the time, "People didn't do their homework. The bigger your balance sheet is, the less homework they do on these things."

Del Biaggio's attorney said in a statement that he will likely plead guilty, and face jail time, to charges against him. Del Biaggo has been fully cooperative with agents. The minimum sentence against security fraud is 25 years.

With the economy going like it is, it is important to remember there are perfectly good and legal ways to ensure you are entrusting your money with upstanding individuals. Most criminals are repeat offenders and leave a trail of evidence behind them. It's up to you to follow it and do your homework.

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Job Scams on the Rise

As the unemployment rate rises, job seekers are facing tougher and tougher competition. More than 1 million jobs alone have been cut this year. The Better Business Bureau (BBB) began receiving calls about a Texas company scamming job applicants.



Antonio Sillano (AKA: Allasondra Sillanogarry) allegedly made thousands of dollars by duping job applicants into paying for their own background investigation after being promised jobs that didn't exist. Hundreds of applicants were conned into paying the upfront fee of $80-$150.

After the fee was ponied up, the applicants never received word from the company's HR department, and the jobs never materialized.

Sillano first came under investigation in February 2007. The BBB had complaints on their reliability report since that time that they were unable to resolve. Sillano was arrested by Memphis police after advertising jobs there. Sillano is accused of identity theft and the Memphis police believe Sillano has operated under various aliases for some time.

The Better Business Bureau urges job seeks to keep a watchful eye out for scams. With the demand for jobs out there, it is safe to say we will see more of this type of behavior. Applicants shouldn't have to pay for their background investigations, the employers typically takes care of that. If you feel you are a victim of a scam, contact the credit bureaus and your own credit card company for further investigation.

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The Economy and the Job Market: What You Should Know

It seems like everyday I read about more and more companies laying off hundreds, if not thousands, of employees. I find myself looking a little harder at the men and women on the corner asking for change and wonder, will there soon be more?

It is safe to say that with these trying times come many hardships. Even those heavily qualified in their fields may find landing a job to be difficult. The competition is at hand, how will you stack up?

Since companies are hurting, too, corporations are looking far beyond job applications to insure they get the right person for the job. The wrong hiring decision can cost a company thousands of dollars and that is just the start. The loss of productivity in these trying times would pack an especially hard punch.

So, in addition to traditional background screening that includes a criminal background check, address trace, credit report or driving record, they are looking to surveys that convey an applicant's honesty and morality level, and even asking applicants to participate in medical exams to avoid increasing health care costs.

All the tactics to get the right person listed above are legal, but there are some employers taking too many steps and if they are not careful, could end up in hot water. Below are list of things employers should never ask as part of the job applicant screening process:

• Are you planning to have children?
• Is your child-care provider dependable?
• What prescription drugs are you currently using?
• Ever been treated for mental health problems?

Asking questions like these leaves companies open to discrimination lawsuits. When money is at stake, we all get a little more nervous, but make sure to make good, and lawful, hiring decisions and your bottom line might just weather the storm.

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Hawaii Teacher Drug Testing Program In Jeapordy Due to Economy

Hawaii recently mandated that all teachers would have to submit to a drug test to remain working in Hawaii public schools. Early contract talks are stalling out because the teacher's union is so opposed to the mandate.

Governor Linda Lingle is all too aware of the problem, and is facing economic turmoil as well. The Hawaii Council on Revenues predicts a state tax decrease of $75 million. Revenue growth productions are also expected to decline.

Lingle said that the downturn would force adjustments to the state budget and special funds. "I'm anxious for the election to get over and for the Legislature to elect their leadership so we can sit down (and) begin the discussion between us and the community," she said. Executive branch agencies have already been ordered to draft budget cuts of 10 to 20 percent.

Lingle originally pushed for the random drug testing program for the teachers, and hasn't been able to implement it. She did release state funds for a last round of teacher pay raises despite the unresolved drug testing issue.

The Hawaii Labor Relations Board is reviewing the current contract to see if it requires drug testing to begin. Teachers are fighting it, arguing that the drug test should be limited to cause for suspicion.

Where the funds will come from to support the random drug testing program is unannounced.

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