CODESP Background and Reference Investigations — Questions and Answers

Question 1: Under the Fair Credit Reporting Act (FCRA), how far back can a consumer reporting agency report bankruptcies?

7 years
10 years (Correct answer)
15 years
Indefinitely

Correct answer: 10 years

Under FCRA, bankruptcies may be reported for up to 10 years from the date of filing.

Question 2: Which of the following best describes a 'release of information' form used in background investigations?

A court order requiring disclosure of criminal records
A signed authorization allowing employers to obtain personal information from third parties (Correct answer)
A document waiving all liability for the investigator
An agency agreement between two employers sharing candidate data

Correct answer: A signed authorization allowing employers to obtain personal information from third parties

A release of information form is a signed authorization from the candidate allowing the employer to obtain records and references from third parties.

Question 3: When verifying a candidate's prior employment, what is the most appropriate action if a previous employer only confirms dates of employment and job title?

Reject the candidate due to uncooperative references
Accept the information provided and document it accurately (Correct answer)
Attempt to obtain the information through a third-party records broker without consent
Require the candidate to resubmit the application

Correct answer: Accept the information provided and document it accurately

Many employers have policies limiting what they disclose; the investigator should document the verified information and note any limitations encountered.

Question 4: Which federal law prohibits employers from using background check information to discriminate based on national origin?

The Privacy Act of 1974
Title VII of the Civil Rights Act of 1964 (Correct answer)
The Employee Polygraph Protection Act
The Occupational Safety and Health Act

Correct answer: Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on national origin, race, color, religion, and sex.

Question 5: In the context of reference checks, a structured reference interview is preferred because it:

Allows the investigator to ask any question that comes to mind
Provides consistent, job-related questions asked of all references (Correct answer)
Enables the investigator to gather personal opinions about the candidate's lifestyle
Reduces the time spent on each reference call

Correct answer: Provides consistent, job-related questions asked of all references

Structured reference interviews ensure consistency and job-relatedness, reducing bias and supporting defensible hiring decisions.

Question 6: What does the term 'adverse action' mean in the context of FCRA and background investigations?

A criminal conviction discovered during the investigation
Any action taken against a candidate that negatively affects their employment opportunity based on a consumer report (Correct answer)
A reference who refuses to provide information
A discrepancy found between a resume and verified records

Correct answer: Any action taken against a candidate that negatively affects their employment opportunity based on a consumer report

Adverse action under FCRA refers to denying employment or taking other negative action based on information in a consumer report, requiring specific notification procedures.

Question 7: Which of the following is an example of a red flag that might warrant additional scrutiny during a background investigation?

A candidate who has worked at many companies over a 20-year career
Unexplained gaps in employment history that the candidate cannot account for (Correct answer)
A candidate who has lived in multiple states
References who are former supervisors rather than coworkers

Correct answer: Unexplained gaps in employment history that the candidate cannot account for

Unexplained employment gaps may indicate undisclosed terminations, incarceration, or other relevant circumstances warranting follow-up.

Question 8: Which type of background check is specifically designed to verify that a candidate possesses the academic credentials they claim?

Criminal history check
Credit history check
Education verification (Correct answer)
Professional license verification

Correct answer: Education verification

Education verification confirms that the degrees, diplomas, or certifications listed by a candidate were actually awarded by the stated institution.

Question 9: An employer conducting a background investigation for a position involving financial responsibilities should pay particular attention to:

Driving record history
Credit history and financial responsibility indicators (Correct answer)
Military service records
Social media activity

Correct answer: Credit history and financial responsibility indicators

For positions with financial duties, credit history can be a relevant indicator of financial responsibility and potential risk of theft or fraud.

Question 10: The concept of 'negligent hiring' holds that an employer may be liable if:

The employer fails to offer competitive wages
An employee causes harm that a reasonable background check would have revealed as foreseeable (Correct answer)
The employer hires too quickly without posting a job opening
A background check takes longer than 30 days to complete

Correct answer: An employee causes harm that a reasonable background check would have revealed as foreseeable

Negligent hiring occurs when an employer fails to exercise reasonable care in screening candidates and an employee's harmful conduct was foreseeable from available information.

Question 11: When conducting reference checks by telephone, investigators should document which of the following?

Only the positive comments made by the reference
The date, time, reference's name and title, questions asked, and responses given (Correct answer)
Only information that differs from what the candidate stated
The investigator's personal impressions of the reference's credibility

Correct answer: The date, time, reference's name and title, questions asked, and responses given

Comprehensive documentation of all aspects of the reference conversation creates an accurate record and supports defensible hiring decisions.

Question 12: Which scenario best illustrates a conflict of interest in conducting background investigations?

An investigator who has previously worked in law enforcement
An investigator assigned to check the background of a personal friend who is a job candidate (Correct answer)
An investigator who specializes in a particular industry
An investigator who uses multiple sources to verify information

Correct answer: An investigator assigned to check the background of a personal friend who is a job candidate

Investigating a personal friend creates a conflict of interest because the personal relationship may compromise the investigator's objectivity.

Question 13: Under CODESP guidelines, background investigation results should be used to make employment decisions based primarily on:

The total number of negative findings, regardless of type
Job-relatedness of findings to the specific duties and responsibilities of the position (Correct answer)
The personal judgment of the hiring manager without documentation
Comparison with other candidates' background findings

Correct answer: Job-relatedness of findings to the specific duties and responsibilities of the position

Employment decisions based on background findings must be grounded in the relevance of those findings to the specific requirements of the job.

Question 14: A candidate discloses a misdemeanor conviction from 12 years ago on their application. The best practice is to:

Automatically disqualify the candidate
Evaluate the conviction's nature, recency, and relevance to the specific job duties (Correct answer)
Ignore the conviction since it is older than 10 years
Refer the matter to law enforcement without further evaluation

Correct answer: Evaluate the conviction's nature, recency, and relevance to the specific job duties

Best practice requires individualized assessment considering the nature of the offense, time elapsed, and its relevance to the position rather than automatic disqualification.

Question 15: Which of the following best describes the purpose of a 'ban the box' policy?

Prohibiting employers from conducting any criminal background checks
Delaying inquiry into criminal history until later in the hiring process after initial screening (Correct answer)
Requiring all convictions to be automatically disclosed on job postings
Limiting background checks to positions with security clearances only

Correct answer: Delaying inquiry into criminal history until later in the hiring process after initial screening

'Ban the box' policies remove the criminal history checkbox from initial job applications, allowing candidates to be evaluated on qualifications first.

Question 16: When a reference provides highly negative and potentially defamatory information about a candidate, the investigator should:

Immediately share the information with all hiring panel members
Document the information objectively and note it as one source's perspective, subject to verification (Correct answer)
Discard the information to protect the candidate
Ask the reference to put their comments in writing and sign them

Correct answer: Document the information objectively and note it as one source's perspective, subject to verification

Investigators should document negative reference information objectively and factually while noting it represents one source, allowing decision-makers to weigh it appropriately.

Question 17: Which federal agency provides guidance on how employers should use criminal records in hiring decisions to avoid discriminatory impact?

The Department of Labor (DOL)
The Equal Employment Opportunity Commission (EEOC) (Correct answer)
The Federal Bureau of Investigation (FBI)
The Department of Justice (DOJ)

Correct answer: The Equal Employment Opportunity Commission (EEOC)

The EEOC issued guidance in 2012 on the use of arrest and conviction records in employment decisions under Title VII.

Question 18: The primary difference between an 'arrest record' and a 'conviction record' in background investigations is:

Arrests are more serious than convictions for employment purposes
An arrest indicates an accusation but not guilt, while a conviction represents a legal finding of guilt (Correct answer)
Convictions can be hidden from employers but arrests cannot
Only convictions can be discovered through criminal background checks

Correct answer: An arrest indicates an accusation but not guilt, while a conviction represents a legal finding of guilt

An arrest indicates only that a person was accused of a crime; a conviction means a court found the person guilty or they pleaded guilty.

Question 19: For positions requiring a federal security clearance, background investigations are conducted by:

The hiring agency's HR department independently
Authorized federal investigative agencies such as the Office of Personnel Management (OPM) or DoD (Correct answer)
Private background check companies under contract with the candidate
State law enforcement agencies in the candidate's home state

Correct answer: Authorized federal investigative agencies such as the Office of Personnel Management (OPM) or DoD

Federal security clearance investigations are conducted by authorized federal investigative agencies, primarily OPM's National Background Investigations Bureau or DoD components.

Question 20: Which situation represents an appropriate use of social media screening during a background investigation?

Searching for the candidate's political opinions to assess cultural fit
Verifying publicly shared professional accomplishments and detecting potential misrepresentations (Correct answer)
Using social media to determine a candidate's race or religion
Creating a fake profile to gain access to a candidate's private posts

Correct answer: Verifying publicly shared professional accomplishments and detecting potential misrepresentations

Social media screening is appropriate for verifying job-related claims and detecting misrepresentations, but must not be used to gather information about protected characteristics.

Question 21: In a background investigation, 'third-party verification' refers to:

Having three different employees review the candidate's application
Confirming information through sources independent of the candidate, such as employers, schools, or agencies (Correct answer)
Requiring three personal references in addition to professional references
Using a third-party vendor to conduct the background investigation

Correct answer: Confirming information through sources independent of the candidate, such as employers, schools, or agencies

Third-party verification means confirming candidate-supplied information directly from independent external sources rather than relying solely on the candidate's self-report.

CODESP Background and Reference Investigations

Under the Fair Credit Reporting Act (FCRA), how far back can a consumer reporting agency report bankruptcies?

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