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When outsourcing work to third-party vendors, you are at the mercy of their hiring standards and practices. There was a time when requesting permission to run a background check on third-party vendors was received poorly and considered a rude inquiry. The climate has since changed in favor of due diligence, however, and that’s good news for you.

Nowadays, if someone resists your request, it’s likely a sign they have something to hide. Rest assured that today, conducting background checks is regarded as good business.

Note: Background checks are subject to the Fair Credit Reporting Act.

Some areas to review for potential red flags during a background check include:

Criminal History
If someone you’ll be working with closely has a history of stealing from his/her employer, it’s probably best to end the relationship before it even begins.


Vendor Credentials
It’s important to ensure any special licenses are up-to-date and valid, particularly within industries such as healthcare, construction, logistics, and transportation, as well as the environmental/energy sector.


Alternate Business Names
Operations under different business names might indicate they’ve been in trouble either financially, or legally, in the past.


Insurance Compliance
Are they insured? If not, the burden of risk may fall upon you in the case of an accident or lawsuit.


Worker Eligibility
Are all employees legal residents? Insurance coverage may be void for undocumented workers.


Customer Reviews
This is the simplest information to come by, and could be an excellent indicator of dependability, temperament, and trustworthiness. Just be sure to be mindful of potential biases, and follow up with the vendor in question regarding specific instances before assuming a review’s validity.


Better Business Bureau Check

BBB offers reports on:

  • Licensing
  • Customer Complaints
  • Government Actions
  • Out of Business Status
  • Misuse of Better Business Bureau Name/Logo
  • Bankruptcy Filings
  • Outstanding Lawsuits

It’s wise to look deeper into any lawsuits involving third-party vendors. Be sure to consider who is at fault, though. Writing a vendor off solely because of litigation could mean losing out on a great partnership if they are not at fault in the first place.

To learn more about business background checks with BCS, schedule a demo today.

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