Private Investigator Exam Background Investigations 3

Question 1

When conducting a background investigation on a candidate for a position of trust, what is the most important factor in determining the scope of the investigation?

Accepted Answer

The scope should be proportional to the sensitivity and risk level of the position

Answer

The investigation should be as broad as possible to uncover all available information

Answer

All background checks must include a full credit history regardless of the job

Answer

Only criminal history needs to be verified for any position of trust

Question 2

Under the FCRA, what is 'adverse action' in the context of employment background checks?

Accepted Answer

Taking a negative employment action based on consumer report findings, triggering required notice to the applicant

Answer

Filing a civil lawsuit against a job applicant based on discovered records

Answer

Reporting criminal findings to law enforcement without client authorization

Answer

Refusing to provide a requested background check report to an employer

Question 3

What does the term 'chain of custody' mean when applied to evidence gathered during a background investigation?

Accepted Answer

A documented record showing who has possessed evidence and how it has been handled and stored

Answer

The hierarchy of authority within a licensed PI firm

Answer

The chronological sequence of interviews conducted with witnesses

Answer

A time-stamped log of all surveillance activities during an investigation

Question 4

Which public records source would BEST reveal whether a subject has had a professional license revoked, suspended, or subject to disciplinary action?

Accepted Answer

State professional licensing board records

Answer

County civil court docket records

Answer

Federal bankruptcy court filings

Answer

State vital statistics records

Question 5

Why are fictitious business name (DBA) filings particularly useful in a background investigation involving a business entity?

Accepted Answer

They identify the true owner or owners behind a business operating under a trade name

Answer

They reveal whether a business is operating without required permits

Answer

They disclose a company's annual gross revenue and tax obligations

Answer

They contain criminal records linked to a business's registered agent

Question 6

When investigating a subject's financial history, which federal court record would indicate that a creditor obtained a legal ruling requiring the subject to pay a debt?

Accepted Answer

Civil money judgment

Answer

Chapter 13 bankruptcy petition

Answer

Federal tax lien notice

Answer

Lis pendens notice

Question 7

During a background investigation, a PI discovers that a subject has used multiple different Social Security numbers. What should the PI do FIRST?

Accepted Answer

Document the finding thoroughly and report it to the client as a significant red flag

Answer

Report the discrepancy directly to the Social Security Administration

Answer

Confront the subject directly about the use of multiple SSNs

Answer

Immediately contact local law enforcement about potential identity fraud