Are you hiring for your organization and want to make sure you have qualified candidates? Don't miss this important video about why background screening is a vital step in the hiring process. Hank Balevic is a former FBI Agent and started FIdelity Data Service to make sure companies are doing background checks the right way. So many criminals can fall through the cracks and hiring the wrong person can be dangerous. Find out all the must-know information about background screening and how it can help your business succeed.
See how Fidelity Data Service can help you hire the right person.
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This podcast is produced by Two Brothers Creative 2023.
Brad Larsen: Hey everybody. On today's episode, I've got Hank from Fidelity Data Service and we're going to be talking about employment background checks, crucial stuff here. You got to listen.
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Brad Larsen: Welcome, everybody, to another edition of the Property Management Mastermind podcast. I'm your host, Brad Larsen. Now today's guest. I've got Mister Hank coming on, and he's got a really interesting story and it touches a lot of us in a couple of different ways because, well, without trying to steal some of his thunder, it really is something that we are not doing very well in our industry for a number of different reasons. And I wanted to bring Hank on because I thought his story is very interesting and it directly applies to a lot of us because we are dealing with some very, very important issues in the property management industry world, especially in our single family home, residential world, the multifamily world, lots of money flying around, lots of money in commercial, lots of money in residential. And we are money managers first. In a side effect of that, we manage assets. The assets are the properties, residential, commercial, whatever those could be. So, I want to bring Hank on, and I want to give him the floor to introduce himself. And he was telling a story preshow, and I said, hey, hey, stop, start there. That is magical. I want to hear that all over again. I think he's going to be a really interesting cat to interview. So, Hank, thanks for coming on today. How are you, sir? Please continue with that introduction that you were giving me. Go ahead, sir.
Hank Balevic: Okay. Well, as I said, formerly with the FBI, that's where I got my training for background checks. I started my own company 13 years ago doing background screening. And as any good entrepreneur, you've got to go out and beat the bushes for new business. So, in that connection, I was talking to a large automobile dealer, and I asked him who he was using to do background checks. He told me, I said, I'm very familiar with that company. They've been sued over 156 times for violations of the Fair Credit Reporting Act. He seemed nonplussed. He didn't seem to be too concerned about it. Come to find out, as we talked a little more, he was getting a good deal on the background checks. Very, very cheap price. We couldn't match it. So, I pointed that out to him, that you get what you pay for. So, he said, Well, you know, Hank, we're going to continue doing what we're doing. Thanks for the call. And hung up. And it really incensed me that he was so oblivious to all these outright violations of federal law. So, I said, I'm going to put something together.
Hank Balevic: I'm going to write a book on this. And that's what I did. And I learned that over 100 background screening companies have been sued for violations of the Fair Credit Reporting Act. I also learned that 75 of the Fortune 1000 companies have also paid millions, if not hundreds of millions of dollars in damages to plaintiff’s attorneys on behalf of their applicants. So, I said. It's in effect, that's fallout that these other companies become victims themselves as well as the applicants. One of the things I wanted to do was list. What violations are being what the violations that companies are doing under the Fair Credit Reporting Act. So, what I'd like to do is go through the prevalent violations that are being seen every day by me. The FCRA. The Fair Credit Reporting Act was written. I believe it was in 1970, ostensibly to regulate back regulate the three. Uh, credit bureaus. Then later on, because of the advent of background screening, they did more and more regulation of the act themselves. And that's what I want to talk about, the FT
Brad Larsen: Let's give the listeners a sorry to cut you off. Hank let's let's give the listeners a little bit more information about you. You run an own Fidelity data service that's FidelityDataservice.com. You guys, you do a complete background screening and just looking through your website real quick. You offer searches for federal criminal search, federal civil county credit, Social Security numbers, motor vehicles, worker's comp and where I think your services could be most valuable for our industry is the employment background screening, because I feel that anybody who touches funds that go in and out of our organization, they need to be very well screened. And that's a next level screening. That's an FBI level screening. It's not just a standard credit score or screening because criminals and past felons can slip through the cracks. And so, I want to give the listeners that context. And now I'm actually kind of fascinated because you are a former FBI agent and you've applied that trade to the consumer world. And I really think this is a neat opportunity for people to learn more about the background screening. So, I'm interested to hear more about that realm of if you were to say, hey, I'm going to I'm going to have a new accounting coordinator start tomorrow, I need you to screen potentially that person, make sure they're not a convicted felon, make sure they're not a, you know, anything that could be bad or cause me harm. That's kind of where I think the listeners really want to hear what you can do for them. And the story, of course, of the FCRA is kind of interesting too, so please continue, sir.
Hank Balevic: Okay. If I were to make a pitch to a new company, whether it's an employer, an automobile dealership or a property management company like yourselves, you're not only doing backgrounds on the applicants that are going to move into houses or apartments, townhouses, but as you point out, the employees that are handling money. The biggest thing. And when I was with the bureau, I investigated a lot of bank fraud and embezzlement cases. So, a lot of what we would do for somebody that's going to handle money would be number one. We do a nationwide background check to see if they've been arrested any place other than where they live or work. It would be nice to be able to do a fingerprint check. That's what we did in the bureau because people use different names. That would be good. Also, do a federal search because there are two divisions of criminal searches. One is basically local and state. That would be robberies and kidnapping, maybe on a local level. Different types of fraud. Federally, it's a separate entity, whereas. An armed robbery is a local offense. If someone robs a bank and it becomes a federal offense, anything having to do with banks, bank fraud and embezzlement, that's a federal offense. So, you want to check that to make sure that they haven't violated some federal law. And I would say maybe 25% of the arrests and convictions are federal.
Hank Balevic: So that needs to be done. The other thing is a credit check to make sure that they're responsible or paying their bills. They're not over their head. So, you want to do that. You also want to do the national sex offender registry. We do that. It's very inexpensive. And that lets you know if they've got some problems in that area. Obviously, you wouldn't want them working with somebody and harassing anybody in the workplace. So, the other is that's very, very important is the county level search and a lot of background screening companies that have been sued don't do that. They go to a stale database. We go to the county records. It's up to date. We have an electronic integration with county level courthouses. So, for example, if somebody was arrested for fraud or or theft and then they were judged not guilty, or adjudication was withheld or some other court activity. We would find that out immediately. Using stale databases, you would never know that that in and of itself is a violation of Fair Credit Reporting Act. Supposing somebody was arrested, found not guilty, that shouldn't show up on a background check. But sometimes it does if they don't have up to date records. Again, up to date records are going to give you a good idea of what's going on with that individual because it's up to date.
Brad Larsen: Also, I think that's very important, and I was very short sighted there. Hank was very short sighted a minute ago because I only applied that in my mind to anyone that handles money. But now that you mentioned some of the the background checks, you do not just in in the money realm, but also the sex offender realm, for example, that has kind of like, you know, smacked me in the face saying we need to be doing this for potentially all employees because our employees are either handling our owner's money, tenants money with account numbers, you know, just a regular property manager sitting in the office to a field technician who's out there doing inspections on our behalf and dealing face to face with tenants, All those people need to be screened, too, including maintenance men who are also face to face with residents and those they need to be screened. So, you really kind of have to make the case that anybody working for a property management organization, because of our sensitive nature of dealing with residents face to face, in addition to money and all the account background information in the backside, and not to mention millions flying in and out every month with rent, you got to make the case. And, you know, I think everyone's interested to kind of hear a little bit more about how your service can help protect us from a bad hire. I guess that would be a real good place to keep going with this.
Hank Balevic: Okay. Again, it's a thorough criminal background check, criminal at the county level and at the federal level. So, what do you find out for for a person? You're going to check his residence and going back to the bureau, we would check in the courthouse every place he has ever lived, any place that he has ever worked. For example, you're in San Antonio. How about if somebody lives in San Antonio but they work in Austin or they work in a neighboring county, you would want to go to that county courthouse to find out if they were arrested in in in that county. So, you've got to do the county level searches at every location that they've either resided, or they've worked. So, you get a complete background on them. The other thing is a credit bureau check. A lot of times they use different names and they show up. And as a matter of fact, the Fair Credit Reporting Act has gotten on companies like Experian and TransUnion and Equifax because they mix up names in the credit bureau file. But as an investigator, it's really a good lead for us to find out if somebody is using a different name. So, you want to do that. I mentioned federal, of course, the sex offender registry. That's very important. And we do a Social Security number, residence check. So, suppose if somebody gives you an application and they say, well, I've lived in San Antonio all my life. Well, when we do that resident check, we say, Wait, wait a minute. You lived in Baltimore for six years. You lived in Maywood, New Jersey for a period of time. So now that gives you a lead information on checking the counties that they lived in up there. Also, they're giving you a fraudulent making a fraudulent application. So that's an indication if they're going to withheld or withhold information, maybe you want to give them a second look.
Brad Larsen: Makes a lot of sense to me. And so, I'm looking at your website FidelityDataservice.com. And again, this comes into play in our industry because we're all doing screening right now. We're screening applicants through typically our software. The software could be rip vine is what we choose and promote. There's AppFolio, there's property where there's rent manager, there's Yardi, there's, uh, I'm sure there I'm forgetting a couple others and they're going to hate on me. But there's all these different softwares out there that do property management work, and they have built in screening applications for applicants wanting to become tenant slash residents. So, they do the basics right. And it could be 15, 20 bucks, whatever. It's going to be that math. But this, in my opinion, is for the next level. This is for the employees. And I think this is something that I would recommend to a lot of people. I think we're going to implement something like this into our hiring process for sure. Is doing a little bit more of a background check upon all of our employees. And I think that's good standard practice because it can really get you in trouble a lot of different ways. And Fidelity Data Service. So, I want you to talk about. Okay. How do we potentially talk with your team about doing a really good, complete background screening for one of our potential employees? Please talk us through what that entails and how we reach you, what that potentially would cost and the time frame it would take.
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Hank Balevic: First. It starts with a service agreement. We have to have your permission that you are going to abide by the fair credit terms and conditions of the Fair Credit Reporting Act. So, we're on the same page, so to speak. We don't have any hold harmless agreement. And I was going to mention that that is a big problem with a lot of companies. The Fair Credit Reporting Act dictates or mandates that you use a proper authorization form, no hold harmless agreement, nothing in there that says we're going to release you, the company or from any liability for any mistakes you make. We have a huge. Supermarket chain down here in Florida. They're in seven states. They were sued for using an a authorization form that contained this liability waiver, page $6.8 million. And they're not alone. Many, many companies and these are background screening companies that will give their client an authorization form that's illegal. So you've got to watch out for that. So, we give you a service agreement. You agree to abide by the terms and conditions of the Fair Credit Reporting Act, and then we give you a proposal. And as I said, I would recommend a federal search, county level search where they have lived. Also, the nationwide, because that picks up some things, even though it's a database which I don't like. That's when you get stale information. They have a process called screen scraping where they go in these big companies go in and get the information from the county level databases. Now it goes into their database and now we've got a couple days lag, a week lag, maybe months.
Hank Balevic: So, you have to go to the county level and do that. The other thing would be a credit report and the nationwide, the sex offender registry, that's very, very important. You talk about employees. We had a case where this individual hired on as a repair man and the maintenance guy at a big it was a three-level condominium complex, probably a thousand units. He had a key to everybody's apartment. He had a master key. So, this one night, he had had a couple pops, a couple drinks. He goes over, uses a key to break in and rapes one of the women. Big lawsuit. And come to find out they never did a background check on this guy, did they? They were checking on the applicants. Thoroughly check them out. But they didn't do a background check on this employee. And we see it all the time where people have criminal records. They sort of squeak by the the the screening process. There's one case I'm familiar with. It involved Home Depot. They missed the guy that slashed his girlfriend, raped her. And they hired him. Fell underneath the they didn't do a thorough background check. They got it mixed up. It was sloppy old. And this individual served seven years in prison. So. Getting back to what I would recommend. County level, federal sex offender credit bureau. And then with the Social Security number Trace, we're going to find out if there have been they're hiding any information on where they may have lived. So that would be all right.
Brad Larsen: So, what would that what would something like that cost us?
Hank Balevic: Probably, I'm going to say 46 bucks. That's it. Yeah. We would do the federal. We charge $12. The nationwide is only. 8 or 10 bucks. Credit bureaus 15. I don't have my calculator in front of me, but yeah, let's say for 50 bucks or less. County level is ten. So, we're talking ten, 20, 30. Uh, 30. That would be 45. Let's say, in the range of 50 bucks. 50, maybe a little more.
Brad Larsen: That's that's that's very affordable. Where do I sign? And the reason I say that is this to me should be standard operating procedure for almost every management company. I should say not. It should be standard fare for every property management company that has employees. Because those two horror stories you talked about with Home Depot and you talked about the condominium, that's exactly what we do. If you hire or engage with a maintenance man, you could potentially even take it to the next level. If you're using third party vendors and ensure they're doing that. I know that's a little bit intrusive when a third party vendor you're going to a vendor that's, you know, X, Y, Z maintenance company and you say, Hey, I want you to background screen all of your dudes or gals that enter any one of my homes, go to this service, fill out this information, and we'll pay for the background screening. I can see that being a thing. But, you know, it's we for sure got to start with ourselves. So, I'm looking at hiring a field technician. And when we start really narrowing that funnel down for this field tech, one of our standard procedures I think, will be to engage a company like yours and pay the money 40, 50, 60 bucks, whatever that total math is, and then have your background screeners run and do their their job and get that report back to us. Now, typically, how long does this take your team to do?
Hank Balevic: We usually have it done in two days. Because most of what we do is electronic. Now, if we do, we have been requested, and I'm a private investigator in Florida. There was at one time a requirement if you did any reference checks, you had to be a private investigator because you're dealing with people's reputations. So when you go out and we have done this just like the bureau, the FBI, when they do a full field investigation, they contact neighbors. Knock on the door next door. Do you know, Jimmy? How long have you known him? We used to use something called Carl Character Associates. Reputation and loyalty. That would be to the country, to the US government. That's what we would ask the neighbors. Do you know of any bad anything in his background that would. That would be a detriment to working with sensitive information for the government. We just had this in the news, this character up in Massachusetts, he had full access to all the top secret documents. I and others that worked for the bureau couldn't understand why he had this treasure trove of information. So that type of background investigation would show would show the type of character we have here. So, while I don't recommend that, but say if you were going to hire somebody in a top-level position, it might be that you want to look at his reputation. Does he beat his wife?
Brad Larsen: Agreed. I think this is. Yeah, this is a good solution. It's kind of like this is a this is a missing part to our industry. There's just not a lot of vendors out there promoting or even in. And again, we keep our ears open, and we look to to hear about vendors doing this. Now, we have plenty of screening vendors out there, but none of them are really focusing on the employment now. They say they do, but I don't know to the level of background screening they go to. And I've seen some of them before, some of these third-party vendors and they're not that not that good. So, I think an FBI backed person who wrote the book on it, like you have, sir, and can be a really good, as they say, arrow in the quiver for property management companies. I myself, I'm going to start using you guys. I'm going to start putting this into our standard operating procedures for new hires is let's run a background check through Fidelity data service.com. Here's the phone number (561) 404-8940. Fidelity data service.com. And you too can run a background check with their forms filled out and all the information that they need they'll guide you through that and you can have that that check done. This also can be very good as a point of distinction for your owners and or your residents to be able to show them or tell them, at least with confidence that you have background screened all of your employees. And that's a big deal. I think a lot of owners and especially residents, I mean, they are very nervous about who's in their homes and they want to know that there's you know, there's some there's some follow up to that. And it's just good, really good procedures. So, Hank, I wanted to thank you for coming on. I think you told us quite a bit. I'm very excited about what you're offering. I know it's kind of a short episode, but really there's not a lot to discuss other than listen to horror stories. And I don't know if I can I can tolerate any more.
Hank Balevic: Yeah, well, you know, one of the things we started doing, I wrote this book, it took me 15 months to do seven days a week, looked at over 1000, probably about 1500 lawsuits. So, I came up with this. So, it's it's a book of 380 pages. And what I do is anybody new, one of our new customers, I give them a complimentary copy of the book. And it really, really is an eye opener. I just touched on a couple things, especially in your industry, that there are a lot of horror stories on people that are retired. Police officers have been denied a place to live based on a faulty background check because these companies are not going to the county records. They're getting a stale database. They're getting names mixed up. And you in in Texas are sort of like us in Florida. There are a lot of Hispanic names. So, if you do a background check on on somebody named Gonzalez, you better be prepared to use every, every, every tool you have in your in your toolbox. You really, really need to know. So, you're looking at Social Security number, date of birth, residence addresses. I'm going to say nine out of ten companies don't do that. So that's how they mix up people. They brand them as sex offenders and drug drug dealers, and they're innocent. So. I'd be happy to talk to anybody. They get a free copy of the book and it's going to be an eye opener. The other thing is they're going to know what forms they can use and what they can't use. That's very, very important because if somebody gets denied a job based on a faulty background check, the first thing those lawyers are going to do is use discovery. They're going to look at the documents and they're going to say, whoa, not only did he brand him a criminal, but they used a illegal background authorization form. They never gave him a disclosure. And now Pandora's box is open. So, it's really.
Brad Larsen: Really scary stuff, not being not doing it the right way because the sad part is the bigger we get, the bigger targets we are. So, as you become more successful as a property management company and you start to grow in size, potentially you become a bigger target. And some attorneys look at that and like, oh, okay, well, you have you know, you have a good insurance policy. That's something that we can go after. We're just going to go ahead and cause some trouble. And, you know, that's the world we live in with attorneys out there looking for a quick buck or a quick settlement or whatever it may be. Mr. Hank, I want to thank you again for coming on the show. Been a fantastic episode. Expect RentWerx to sign up with you very soon. We're going to start making your services standard operating procedure in all of our hiring practices. Thanks again for coming on. Okay.
Hank Balevic: Thank you, sir. Appreciate it.
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