Should Credit Check Verifications Be Performed Following the Global Pandemic?

Credit check verifications are a common and legal part background check due diligence. The National Association of Professional Background Screeners estimate 25 per cent of HR professionals use credit check verifications while hiring. Other studies suggest nearly half of Canadian employers check applicants’ credit.

Why Use Credit Check Verifications?

In 2018, the Government Canada made credit checks verifications mandatory as part of its personnel security processes. Credit check verifications “help determine an individual’s reliability, particularly as it relates to their ability to meet their financial obligations. While the status of an individual’s financial situation may not affect their ability to do a job, financial obligations or pressures could pose a security risk.”

Credit check verifications can elucidate a person’s financial behavior, which is vital for jobs that require handling large sums of money. Understandably, there is a concern that excessive indebtedness may incentivize unethical and illegal acts such as fraud.

Not only can employers suffer internal losses due to fraud, but they can also be held responsible for rogue employees. In 2020, a real estate agent was found vicariously liable for his clerk’s mortgage fraud scheme even though he was not directly involved.

The Pandemic

Alan Mak, the national forensics leader at BDO Canada, recently told the Canadian HR Reporter that the risk of fraud has increased with the rise of remote work, in part because there’s less on-site collaboration and supervision.

Employers must therefore be a diligent as ever when hiring to ensure these applicants can be trusted with minimal oversight.

However, it is reasonable to ask whether it is appropriate to conduct credit check verifications during this global pandemic. After all, the impact on the economy has affected many people’s pocketbooks.

Half of Canadian households have reported a financial impact due to COVID-19 and 60 per cent of Canadian households whose debt increased attribute it to the pandemic. In addition, 26 per cent reported reduction in regular paid hours, 18 per cent reported a temporary layoff, and 13 per cent reported permanent job loss.

There are no easy answers during this challenging time. Employers must find a balance between exercising proper caution while considering the financial difficulties Canadians have experienced since the start of the pandemic.

Nonetheless, not all financial red flags can be excused as pandemic related. To arrive at an informed decision, employers need the right information and context. Triton’s credit check verifications provide information about a candidate’s financial status, credit rating, reported bankruptcies, collections, liens, and more.

If you would like to learn more, our friendly experts are happy to help answer any questions you have about credit check verifications. You can reach us by phone at 1-855-790-7516, by email at customerservice@tritoncanada.ca, or at our website.