How a Civil Background Check can help you make better decisions

Global's Civil Background Check Package provides a different perspective on an applicant, business partner or financial advisor.  The civil background check will uncover any civil (non-criminal) records on a subject (individual or company), such as bankruptcy, liens, and civil judgments.   This is critical information to receive if you want to better understand the character and decision making of the subject.  

How do civil and criminal records differ?

A civil judgment differs from a criminal judgment in three significant ways. 

  1. Criminal cases are considered a crime against the state or society and charges are brought forth by the federal, state, or local prosecutor.  In contrast, civil case charges are brought forth by the wronged party.  
  2. Civil judgments result in financial penalties, not jail time. 
  3. The burden of proof in a civil case is less stringent than a criminal case.  Where someone may be found not guilty in a criminal case due to a technicality or similar, they may be found responsible in a civil suit. 

A tragic but well known example of this difference is the O.J. Simpson murder trial where he was acquitted of murdering Nicole Brown and Ronald Goldman in a criminal court, but found legally responsible for their deaths in civil court, resulting in $33.5 million in punitive damages.

Examples of when to use a civil record search

When Hiring: 

As an example, if you are hiring a new Accounts Payable Coordinator, Comptroller or Chief Financial Officer, would you want to know if they owe tens of thousands of dollars in tax liens to the IRS or civil judgments to a former employer?   Yes, you would!  This critical information would provide you with the right intelligence to protect your company from potential employee theft and reduce your firm's risk profile.  If you think that your business is not at risk of employee theft, consider the following facts about employee theft at small businesses as presented at the Academy of Criminal Justice Sciences in 2014:

  1. 64% - the percentage of small businesses that have experienced theft
  2. $20,000 - the average amount stolen from small businesses.  The greater the trust in the employee, the larger the amount.
  3. 61% - the number of thefts that are ongoing schemes, averaging 16 months in length

If you expand the scope of businesses to include larger organizations, the numbers are even more alarming (source):

  1. $842,000 - the average amount stolen in all cases (median is $280,000)
  2. 5% - the amount of gross revenue lost to theft each year
  3. While the median loss is highest in the retail industry, the most frequent theft occurs in financial services firms 

Annual Risk Review: 

While performing this search at the time of initial hire is important, it's also important to be vigilant about the risk your existing employees pose.  According to the 2015 Hiscox Embezzlement Watchlist, the most common profile of an embezzler is a long tenured employee, who is a woman, and is 50 years old.  The motivations for employee theft differ in each case. Where some perpetrators are unhappy with their position and want to improve their lifestyle, others are experiencing financial hardships.  While the civil background check will not help identify disgruntled employees, it will help you, as the business owner, gain information on whether employees are going through financial hardship, enabling you to keep a close eye on them until their troubles have passed.

In sum, it is important to conduct a thorough background check inclusive of civil searches as part of an annual risk review.