What You Need To Know About Background Checks featuring Jerry Nielson, CEO of TruDiligence

Danny: Hey, Jerry, thank you so much for joining us on the podcast. I’m so glad that you’re here today, thanks to you, thanks. So much for joining us.

Jerry Nielson: Yeah, thanks, Danny. I appreciate the opportunity to to to have a conversation with you today.

Danny: Yeah. Well, I am a big fan of true diligence, which is interesting because I wouldn’t think that I’d be a giant fan of a background check company. But I just kind of fell into that with you because of our interactions previously. And so I know that that sounds crazy to everybody. But I guess, Jerry, I would love to learn more about like, how did you even get into, like, you know, doing this kind of work, and then tell us a little bit about true diligence.

Jerry Nielson: Yeah, for sure. So so true diligence is a consumer reporting agency, a background check company based out of Denver, Colorado. And we were formed back in 1993. So we are in our 31st year of operations.

Jerry Nielson: I came from at least previous to to true diligence. I came from a a kind of a retail security background and was doing security, consulting in a retail space back in the day. And honestly, what happened was, you know, through that consulting the clients that we were working with in that moment in time were starting to raise these questions about how

Jerry Nielson: how do we take a look at new hires? You know we’re talking 30 years ago, where background checks were a thing, but not the way they are in today’s economy. Right? And so, yeah, it was really, we saw a need. And we were being questioned about the ability to potentially do background checks on new hires.

Jerry Nielson: And so we saw a need that needed to be fulfilled, and a lack of good quality companies that could fulfill that need back in that day, and in that space. And so true diligence really was born out of identifying that need and seeing a market niche that we could potentially service.

Danny – Enginehire: Yeah, well, amazing. I mean, like it just immediately makes me think like what actually even makes a good background check company. I feel like background checks are one of those things that you feel like you have to do when you own a company. You’re not sure about it. You probably are choosing the lowest cost option, but even the highest cost option. You’re really not that sure what the difference is. So what makes a good like? Why should anybody choose any background, check company.

Jerry Nielson: Yeah, for sure. You know, it’s it’s a great comment, because you’re you’re so spot on. We deal with it all the time, you know in the and that people, especially in a human resources, space that are responsible for onboarding applicants to their organizations understand that a background check is just the thing these days. Right? I mean you. You have you, you just you do it. You know there’s very few jobs out there nowadays. A person could think of likely that

Jerry Nielson: don’t have a background check component right? Even if you’re even some of the lower level line jobs all have background check requirements. So we all understand that it has to be done. But that’s kind of to your point. That’s where I think that disconnect happens. It’s like, Okay, well, I got to do it. But now, what? And how’s the right way to do it? And you’re right that we have seen so many companies in our space come and go over the last 30 years.

Jerry Nielson: That thought that this industry was just simply about data. And you’ve heard me say that before we’ve had that conversation kind of private that you know about data. And and I think that’s where the boat gets missed because it’s not about data. It’s about people.

Jerry Nielson: you know, and and yes, and

Jerry Nielson: Every employer has a duty and a desire to want to protect their investments and their assets and their clients. And you know the the people that are within their space, and a background check is A is is A is a foundation of that, of course, but to your point. There are, you know, there are absolutely right ways to do things, and and

Jerry Nielson: more expensive doesn’t necessarily mean that you’re getting a better background check as opposed to your point, picking out somebody who’s the absolute, cheapest, as true diligence. We try to price ourselves really in the middle of the road. I am absolutely not the cheapest. And I we’re we’re absolutely not the most expensive, either, by by a long shot, right? But what we do try to do is is to wrap

Jerry Nielson: just a superior overall user experience. You know, it’s a blending of technology. It’s a blending of compliance, and it’s a blending of old fashion personable customer service to support that right. And I and I. And I do think that that it really is a Melding. The ideal solution is a Melding, of all 3 of those components.

Danny – Enginehire: Yeah, I think that that is, I mean, like we met because somebody suggested putting true diligence inside engine hire. And I was like I don’t know what that is, and I honestly, totally, truly, was just like, do we need another background check company integration? And then I talked with you, and you blew my mind because it really is that bonding thing I never.

Danny – Enginehire: I mean, like, it’s hard to make background checks like fun, or like sexy, or something like that.

Jerry Nielson: It’s not glamorous, for sure.

Jerry Nielson: Yeah, yeah.

Danny – Enginehire: It’s so interesting, because, like, you’re saying, like, I remember before we talked that there’s still like court runners out there, that that is a thing that you would think in this day, and age doesn’t exist. And I guess, could you just explain what it is because you’re gonna do it way better than names.

Jerry Nielson: You bet, absolutely. So. You know, when you’re talking about research processes is really what you’re touching on. There. You know, this is one of the things that that we see people’s heads spin on their shoulders when we tell them that everything is still very fragmented, very jurisdictionally based, you know. Yes, there are some national criminal in this element, criminal searches available. But, generally speaking.

Jerry Nielson: Kansas does not share their data with Colorado, so to speak, right as an example. And so, if you have a person that has address history in Kansas, you need to go to the appropriate data holders in Kansas for that jurisdiction and get their criminal records extracted. And however, however, that happens right, same thing with Colorado. And so you know, typically a good background check will obviously start with a trace on the person’s

Jerry Nielson: social security number as our primary identifier in the Us. And that will develop name and address history that is linked to that person, and then you can use that name and address history to be a roadmap, so to speak, for

Jerry Nielson: where this localized research needs to happen, and if you see, address history in Kansas, you run the appropriate searches in Kansas to get that history extracted in Colorado to get that history extracted right. And so it is still very jurisdictionally based. And to your point.

Jerry Nielson: there’s about 60 to 65, maybe 70% of the country that actually does allow at the court level at the county court level, electronic access into their record. And so a company such as true diligence, one of the values we bring to the table is the ability to have that performed obviously anywhere in the country. Right? And so, you know you, you use

Jerry Nielson: a background check company like true diligence as a single source, to pull all those pieces of the puzzle together for you in a in a single, clear, concise report. So we manage all that in the background. And so for those that are electronic, we have the ability to access those electronically

Jerry Nielson: and to your comment, there’s still about 40% of the country believe it or not, that are still manual research, like somebody, literally, somebody in our retrieval network literally climbs in their car and drives down to the courthouse every day with a list of names and dates of births, and walks up to the clerk’s window, or accesses a terminal in person in the courthouse and pulls that criminal records down

Jerry Nielson: and, like you said, it’s almost mind blowing to think in what we are now that you’re 2024, that that you still have these manual processes that are at play in the background.

Danny – Enginehire: Yeah, you started this company in 1993, right? And you were like, there’s no way that this is still gonna be going on 31 years later.

Jerry Nielson: For sure, right? Because it’s difficult. You know it. It slows things down. It’s it’s costly, you know, to to to have those manual research processes in the mix. And so you know, we, it’s it’s been fun to kind of see the evolution of of the research mechanisms over the years and to start to see things become more

Jerry Nielson: available in more of a streamlined fashion, right to remove some of that manual research. But but yeah, it is. It is. It is really amazing that that there are. There are still

Jerry Nielson: jurisdictions that are and search types, even outside the criminal record realm that are very antiquated right? They’re they’re very antiquated.

Danny – Enginehire: Yeah, so I guess I was wondering like with.

Danny – Enginehire: So you know, agencies they get asked by families all the time like, Hey, what does this background check really do? And

Danny – Enginehire: what does an agency say to like make it sound legit? Because, like again, it kind of background checks kind of just be like, yeah, we check them, and

Danny – Enginehire: there’s nothing on the record. And you can trust this company cause I trust this company. What should somebody like actually be telling them.

Jerry Nielson: Yeah, it’s an excellent question. So you know, I so so think about this. I mean, the way I I talk about this is what is the reason to an earlier comment that we’re doing a background check. In the 1st place, right? We’re trying to protect our agencies. We’re trying to protect our families. We’re trying to protect our nannies right? For sure. You know, everybody involved has some skin in the game at some level right? And so the background check is really designed to not be a barrier to employment. That’s another talking point I always touch on is, you know, just because somebody has something because they were misappropriate. If that’s the right word in a, in a, in a, in a previous situation, right? And picked up a charge, you know, that doesn’t necessarily mean that they’re unemployable. I mean, there, there’s not this necessarily bright line that says you’re a bad person. If something comes back on your background. Check it. It has nothing to do with that right? What it’s about is making sure that all parties involved are armed with the information to make sure that the the the that the match is a proper fit, and that if there is anything there, let’s assess that liability, and make sure that it’s something that all parties are comfortable with right. And so I think, when you take it from a educational standpoint at the beginning, in terms of a background check is is, it’s a screening tool. Yes, but it’s also an educational tool. We need to be informed. Do we need to be educated on what is in this person’s background. And at that point we all can make a decision collectively. You, we all being, you guys and your clients right? As placement agencies can make a disk can make the right decision to move forward right? And so I think that I really do think that it, that the education is the 1st part in terms of of why we’re doing the report in the 1st place, and then, secondly, I think, making sure that you communicate that you are working hopefully with a quality background check company. Right? You’re not using any of these free Google searches to try to look up somebody’s Criminal Record Office on Public Record Index as an agency and as an agency operator and owner. You take the background check process very seriously, and you have partnered with a quality company with decades of experience that has the credentials to offer you the best process and the best product available in that space right? And that that may come with. You know the fact that we are nationally accredited through the professional background screening association. Not all background check companies have that right. And so, whether you use true diligence or not, I think that’s something that that a person would look for in a vendor as an absolute requirement. Again, I think the experience. I think the reviews are important, right? And and you know what are, what are the testimonials? Look like? What are what are other users of the service, saying that help give you the talking points to solidify your process in your clients. Mind as being very valuable. Yeah.

Danny – Enginehire: I think it’s really important. I think that the agencies that use due diligence actually, one of their talking points. Honestly, I really think this is when a family asks them that they go. Listen. If there’s something weird in the background check. I actually can call this company. And I can talk to someone right away. I know Jerry, the president of this company, and and I can ask him about this, and he’s gonna explain it to me, and if we need to make that conversation with loop you into it like we can do that.

Jerry Nielson: Absolutely, absolutely.

Danny – Enginehire: That’s that thing that like some of those background checks company, they’re so faceless. And even I, I guess it’s just yeah, like you’re saying that.

Jerry Nielson: I think, as a differentiator. One of the things that is really important for us is that I do actually require all of our frontline support agents that are dealing with client support issues to be advanced, certified in the Fcra in the fair code reporting again, it’s just something that we just. It’s just something that’s important to us. And I want to make sure that any of those forward facing support personnel have that certification and can have those conversations from a regulatory and from a compliance standpoint, and to your point be available.  You know it sounds so  simple but customer service is absolutely faceless in in in our world today, not just in background checks in so many places. And and it is something, maybe because we have been operating so long. And that’s just that’s just you know where my passion is in the overall user experience. And in that support that you absolutely can call and get somebody on the phone 1st of all, and that person is knowledgeable and and certified, and and able to answer questions and and consult with you about questions that you have, because as as as sad, I think in some ways that that should be a differentiator in, in, in, in the world in which we live today. It is a differentiator because you don’t get that in all places.

Danny – Enginehire: Yeah, I guess. Really, I’m thinking, I’m drawing down notes. And I’m thinking, like, you know, certification like, you guys are certified like across the board in a bunch of areas. And like, really, it just comes down to like digging deep like, why do you like the background check company you’re using. And I guess if I’m going to be honest, I would say like, if it’s because of cost like, maybe you got to dig a little bit deeper and think about why, that’s still important to you, and I think that that’s totally fair. But I’m thinking of like when a family asks you like, why do you use this background check company? I think everything that you were saying is really great is like the customer support. How you know your relationship with this company, how you know the in-depthiness of it, how you trust, how they go about it all these things that it all kind of comes together. But it’s really easy, like we said at the top. You can just like, get a generic check, or like, you can just get one in so many ways, and you don’t have to know why. And when a family asks you why you choose this company, you might not have anything actually good to say.

Jerry Nielson: You know, and I, and you know, and and it it is. It’s it’s somewhere in our marketing materials and in our talking points, right. But I but I you know I I’ve even said, you know, is, would you not agree that even a dollar is too much to pay for in this situation a background check that does absolutely nothing for you. You know you you don’t understand what it encompass. You can’t get people on the phone to answer questions about the the nature of the services that were performed. You you you don’t have the ability to customize packages and to have dedicated support personnel. It’s just very unsupported again, there, to an earlier point. It it’s not about data, right? It it yes, it is data. But but it’s bigger than that. And so yeah, I mean, I you know, I I do think that that it has to wrap into a superior overall user experience. Because if if that’s what you’re going to do. Then you might as well save your dollar right and and and don’t do anything because it’s it’s doing nothing for you. If what you’re doing is just running it for for putting us rubber stamp on it. That says we did this process. And so we are now somehow better for that process, and then mashing it in a file. That’s not doing anything for it.

Danny – Enginehire: Yeah, it. So I’m supposed, I’m thinking now, like.  You know, there are those background checks that only cost a dollar. And I know when you’re doing like employment, it’s it’s not enough like there’s all these laws on that. But, like, what is that dollar check bringing to the table? In the 1st place, and like, why is that not allowed, you know, when it comes to employment like what is happening, you know. Again, it just goes into this rabbit hole of like background checks being so mysterious.

Jerry Nielson: Yeah, it it it absolutely really comes down to compliance more than anything else, I think, is how I would answer that. You know. There. There are absolutely some down and dirty national 3rd party database products that are out there. The the let me be clear. Have they have their place in a background check. We use them in a background check right? In addition to running your social trace and your localized county or State level criminal record searches. We absolutely recommend supplementing your process with a search of those national systems. What we don’t advocate for is using those systems as your only means of checking somebody because they’re not truly national in coverage, right? None of them are. And so I always use this visual image of taking a piece of Swiss cheese and putting it over a map of the United States. It’s got great thick coverage in some areas, and it’s got gaping holes in other areas. And so what happens if you’re using that is your only means of checking somebody, and the place where they may have criminal history at happens to be in one of the holes in the piece of cheese. You’re not going to know anything about it, because that jurisdiction does not contribute their data into the larger system. So, I’m not certainly here to just completely dog and downplay on the national resources, because they are valuable, you know they they, but only as a supplemental tool, and, in fact, even from a regulatory standpoint, there are special considerations that we have to to make sure are in play when utilizing the information that is in one of those national resources, and making sure that we are verifying that and validating that data with a direct source search of the jurisdiction. So if the national database tells you that the person’s got a record, and in some county in Kansas again oh, I’m home on Kansas. But in Kansas then we use that as simply pointer data. Yes, there may be something here that you need to investigate further. So now go, do your diligence and go investigate that further to see how it may be appropriate in this background check. And I think when you talk about some of the lesser expensive ones, I think that that they’re very laxadaisical in some ways, and can be at least with regards to compliance and are simply just selling unvetted potentially non compliant data out there in the marketplace. And so I think that you know, when you’re when you’re looking at this from an employment standpoint, it’s just really important to understand that that there are Federal laws in the Federal Fair Credit Reporting Act, and in other pieces of legislation that that govern this process, and you absolutely need to make sure that you’re maintaining compliance as an employer with those regulations. And if you don’t have warm, fuzzy feelings about your background check company and their ability to help you manage those trails. Then you you probably need to do an evaluation of your process and and and be looking elsewhere.

Danny – Enginehire: Yeah, so it’s making me think of. Like, you know, a company that’s like we check, you know, 1,400 databases. But like to your point earlier, like if doesn’t you, you know, isn’t.

Jerry Nielson: Aren’t contributing.

Danny – Enginehire: That’s your. And that’s where the thing actually is. It doesn’t matter that it’s 1,400 databases.  There’s 40% more databases that should be checked. But you’re skipping it.

Jerry Nielson: Absolutely could be 14,000. And if it’s missing data in the one where your applicant has history. It just blew up on you. Right it it, it failed in its processes. And so yeah, you know, just I, I think I think varying lies the value of using a professional company that understands the the strengths and the weaknesses of each of these mechanisms that we have available to us to to provide a a full picture. It’s really important. Because again, it’s, you know, so many of those national systems. The data is is even where it’s being contributed in some places is very spotty at best right? It’s you know, it’s got a name. It’s got a potential case number. It’s got sometimes a partial date of birth that may or may not be your person, and if that’s what you’re getting back in. Your report is just a scrolling page after page printout of all of these possible matches to your person. Bells and whistles should be going off all over the place right? Because you you absolutely have some liability in that type of a search in the event you were to take action against something in that report that is not your person, and has been misidentified because there was no diligence behind that to confirm identifiers and to get full details and to make sure complete data is present in order for you to make your decision. So there! There are certainly pitfalls in in some of it that you need an experienced guide to help you with.

Danny – Enginehire: Could you tell me a little bit about in a in a past conversation that we’ve had? You were saying? And I believe it’s the county data is like the what you really like want to look at it like there. There was something there about that. And I remember the finding that really interesting. I think it kind of goes with the, you know, the data point checks.

Jerry Nielson: It does, so yeah, so the so think of it this way. When a person gets arrested for a crime of some sort or commits a crime. And they go to court. They do that in a courthouse somewhere within usually a county jurisdiction, you know. That’s where the judge sits. I mean, this is gonna sound very basic. But you know to your point, it’s it, it. That’s where the judge sits. That’s where the jury’s at. That’s where the attorneys operate out of right. So that is the source of all of the action, so to speak. And so anytime that you can make use of these localized county level criminal record searches as one of your search tools. In my opinion, your primary search tool. Then the better because we’re we’re going straight to the source of the action that holds the most current data. What happens? And I think what you’re thinking about a little bit there as well, is the way these larger national systems are compiled is those providers go out, and they compile the data from each of these individual jurisdictions into some larger resource. Awesome tool.

Not the end. All means all right. And so you know, they may get updates from that jurisdiction. Nightly they might get updates from that jurisdiction once a year. Well, is once a year sufficient? Obviously, no, not right. If you’re dealing with data that’s that stale. You’re probably falling down in your processes somewhere. So yeah, when you’re talking about county level searches when you’re talking in the criminal realm, county level searches are by far and away. If anybody out there is using simply just a national resource is their only means of checking somebody’s criminal record. I feel like you absolutely have gaps in your processes that need to be addressed because of those holes that that you’re describing.

Danny – Enginehire: Yeah, that’s perfect thanks for walking us through that. I I remember. Just think that that was so fascinating. How much I guess I think people just will want to know.

So I have to ask. How much should we be? How much should we be paying for these background checks? I feel like I’ve seen the same criteria for the dollar one that I’ve seen, for, like an $80 one, and I’m like I. It blows my mind. But I’m like, Okay, well, the $80 one’s gotta be better than the dollar one. But I’m looking at it like I’m looking at generic and name brand on the back. I’m like it uses the same app.

Jerry Nielson: What’s the difference? Yeah, yeah, absolutely. So you know, I I just thinking about one of our packages specifically, you know, I I if if somebody wanted me to recommend kind of just a base level package just across the broad spectrum of industries, even beyond nannies and domestics, you know. What? What’s what would you consider a good.

A good run of the mill background? Check right? What would that encompass to me that would encompass a trace on their social security as we talked about, to confirm their names and to confirm their identity and to confirm their address. History. We would then do county level criminal record searches against all of the known address history that the applicant has had in the last 7 years can be bigger, can be shorter, can be 3 years can be 10 years whatever a client wants. But let’s just say 7 years is likely an industry standard. And then you supplement those local county searches with a search of the larger national system which gets you the national database and also get you. The national sex offender registry, I think, is is certainly, very important especially in in in this space. We’re talking about. That background check probably should be somewhere around $30.

Danny – Enginehire: Wow cheaper than what it I would think definitely cheaper than what I’ve seen things that I’m like, okay, this has gotta be like the bargain place because it’s so massive. And it’s way more expensive than what you’re saying.

Jerry Nielson: I’ve seen it cheaper. There are usually some limitations. If you see a cheaper package sometimes the limitations that are imposed, or yes, we’re going to look at the address history, and we’re going to assign county criminal record searches against all of this address history over 7 years. But at that price point. We’re only going to include X number of counties, you know, 2 or 3 counties, and if there are any more than that, then you get billed all a cart per additional county. That’s a fine pricing model. We choose one that just includes everything. So you don’t have to think about it right whatever. If if there’s if there’s one county great, if there’s 10 counties, great the prices with the price right? And and let’s just use $30 as an average. There, you know there are nuances to that, you know. There are some times that there are additional costs that roll into that additional names with most background check companies are are built separately, because that’s the way we have to research, even though you know, Mary Smith and Mary Jones might be the same person. When you look at that person’s record at the courthouse they are different names that are being searched, and so we pay per name to get searched. And so we we back Bill per name that gets searched. And so there are nuances in those packages. But I’ve seen that package cheaper with limitations usually. And I’ve seen it all the way up to the $80 price point that you’re talking about for the same exact animal. So if we’re just talking middle of the road averages. You know, that package should probably be somewhere in the high twenties to mid thirties, you know, with a quality company.

Danny – Enginehire: Amazing. I want to ask you, and I’m just going to reveal this about myself. I was a songwriter, and I’m part of not Apna, which is association premieres, which? Yeah, I’m not that. But I am part of scap, which is the Musicians association.

And they allow you to have multiple pseudonyms. And you know, when I started doing this, I was like 17. I’m like, I’m gonna do so many crazy pseudonyms. And I get mail for these crazy pseudonyms these those names like, if someone that’s going to run in background check on me that they’re like, Oh, yeah, we also have to look at these other crazy 10 names.

Jerry Nielson: Sure.

Danny – Enginehire: Can it come up? Or is there something weird happening.

Jerry Nielson: Yeah, it’s a good question. So usually, when we talk about running the trace on the social security number to develop that data, usually the name has to have been used in some sort of a legal financial capacity would be the easiest way to think about it. Right? You you would have to have applied for a car loan or a credit card, or have some sort of financial accounts linked to that specific name, and at that specific address, and then that generates an official entry of that name and address combination on your report that we see back.

You know, nicknames and the you know the pseudonyms and all that kind of stuff likely are not going to show up, even on a social trace report, unless you’ve used those in some sort of a legal and financial capacity, right.

Danny – Enginehire: That’s that’s quite a relief. That crazy one. Jerry.  I guess I could answer you so much more. But thank you so much for sharing your time. And where could someone go to learn more about you true diligence, and probably ask you even harder questions.

Jerry Nielson: Absolutely. We are always happy to answer any questions. You know. We hope as true diligence, and your provider to, to to create that relationship with you. But you know I will just be honest, that we have many of these conversations where somebody just has questions, and and they’re wanting to make sure their processes is solid, and we absolutely are very happy to consult with anybody about their processes. We can always make best practice recommendations. We can probably help you evaluate what you’re currently doing and help plug any holes. If we see extras that maybe are unnecessary, you know, we can obviously make those recommendations as well, and if true diligence earned your business through that process great, and if true, diligence does not, then at least we’ve been able to help better the industry and better your processes as a company, and we’re happy to do so, absolutely, absolutely happy to do so. So people can reach out to us, if of interest, either through our website, which is a TruDiligence.com

And we’ve also got live chat available on the website. We’ve got support agents, you know, available from 7 Am. To 5 Pm. Mountain time Monday through Friday. Certainly love talking the industry, as you can tell. Danny and I have had so many of these conversations, cause we just like talking. We just like talking the industry right? We we kind of geek out on on the industry.

And and so, yeah, love to have you know, a communication from anybody. If we can assist in any way.

Danny – Enginehire: Perfect. Well, thank you so much again for sharing all that information. Yeah, true diligence, true diligence.com. And Jerry. Thanks once again. I really appreciate you joining us today.

Jerry Nielson: Thank thank you, Danny. I sure appreciate your time today. Thank you.