Doing a background check isn’t always necessary if you’re worried about identity theft, but there are situations where it can be a good idea.
Identity theft has been rampant since 2020. The Federal Trade Commission (FTC) has received more than one million reports of identity theft for the fourth consecutive year, and levels are approximately 60% higher than before the pandemic.
While a simple credit report can reveal credit card fraud – the most prevalent form of identity theft – background checks can help you understand what’s going on in rarer cases of criminal identity theft or employment identity theft.
When you do a personal background check, the idea is to see what a potential employer or landlord would see, such as a criminal record, address history, and previous jobs. If there are errors, it means you may be a victim of identity theft.
“You just have to keep in mind that it is just a tool or an indicator I could be helpful,” says attorney Lester Rosen, founder of Employment Screening Resources. “But someone could have used your ID pretty easily in a way that went unnoticed.”
Here’s when to consider a background check and what you can expect.
When should you run a background check?
By running a background check with an online service, you can gain access to employment records that may indicate whether someone has illegally used your Social Security number to earn income. Last year, more than 30,000 Americans reported this type of identity theft to the FTC – an increase of more than 50% over 2019.
Such activity would not appear on a credit report but may appear on a background check that includes employment records. (Alternatively, to investigate on your own, you can get a free copy of your Social Security statement, which shows your earnings history.)
There are also rare cases where stolen identities are used illegally for police or court records, sometimes without the individual’s knowledge. A background check may be helpful if you suspect you have been a victim of this type of crime.
“Background checks could be useful in criminal identity theft cases where someone provides another individual’s personally identifiable information at the time of arrest, and then the arrest report or warrant is issued in the victim’s name, not the person who actually committed the crime,” says Axton Betz-Hamilton, an identity theft expert and assistant professor at South Dakota State University.
Background check services can search databases and scan criminal records from across the country to help you find out if your name appears in any criminal records. These services generally charge fees and are only worth using for identity theft purposes if you suspect something serious.
“Some of these sites you sign up and all of a sudden you become a membership member, then you have to try to cancel the membership,” Rosen says. “You have to be a little careful about which site you use.”
Please note that these online services are not comprehensive, considering there are thousands of cities and counties and many types of records, including police records, sheriff records, and court records.
“There’s no foolproof tool where for a price you can go to a place and definitively say, ‘Okay, no one’s used my name for a criminal record,’” Rosen says.
Other types of background checks that can reveal identity theft
Background checks exist for many different purposes, ranging from firearms permits to government employment to banking, explains Adam Levin, host of the podcast “What the Hack with Adam Levin.” Each type of background check involves different records, he notes.
In addition to the type of background check that can be performed online, identity theft can also sometimes be discovered when employers conduct background checks on new hires or when landlords screen applicants for rental, experts say .
Even though employers and landlords only have limited access to credit profiles for their background checks, it is still possible for identity theft to negatively impact the results of these investigations.
“If a rental application is rejected or you are rejected for employment in the final stages of an interview process, check your credit report to see if there is anything that could be the culprit,” Levin says. “If all else fails: ask why your request failed.”
Finally, Rosen adds that there are rare situations where a background check reveals a criminal complaint and it turns out that the complaint was the result of identity theft.
“Every now and then, you see a situation where someone is really surprised to find out that their identity has been used for some kind of criminal matter,” he says. “It’s rare, but obviously devastating.”
When you don’t have to worry about a background check
However, if you suspect you’re one of the approximately 400,000 people a year whose identity has been used to open new credit accounts, paying for a background check is typically excessive.
Betz-Hamilton says it’s more important to get a copy of your credit report. You can get free copies of your reports and they will show all the credit accounts in your name, as well as the balances. In addition to checking your credit report, experts say you can use credit monitoring programs, some of which are free, to investigate suspicious activity. You should also follow the FTC’s guidance on steps to take if you are dealing with identity theft.
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