Depending on whether an employment check is performed by an outside agency or in-house by the employer, the background check may be federally regulated.  The Fair Credit Reporting Act only regulates outside agency consumer reports.

It is true that there are national standards for performing background checks for employment purposes.  These federal standards are set by the Fair Credit Reporting Act.  These standards only regulate the activities of consumer reporting agencies, which are considered as outside agencies.  The results of these federally regulated background checks are called consumer reports.

Employers will use the services of outside agencies when it is convenient.  Cost can be a major factor when an employer decides on whether using an outside agency is the right choice.  Big companies with many employers may have a working relationship with a reputable consumer reporting agency. 

Caution should be used when choosing a reporting agency.  When a company gathers its information from less than scrupulous companies, the information can be incorrect or old.  These types of companies and the information that is provided should be verified to make sure that the company is capable of providing correct information.  When a consumer reporting agency is capable of producing accurate results consistently then it may be considered a credible company.  If the wrong company is chosen, the resulting consumer reports can be false which can negatively affect the company and employee. 

As for these outside agencies that produce background checks, the three main types are private investigators, online data brokers and those consumer reporting agencies, which only perform employment screening.  Private investigators may be used by smaller companies while the online data brokers and consumer reporting agencies may be more attractive to bigger companies.

Smaller companies can find that it is less expensive to gather background information without the help of a third party.  When a company performs its own background checks, this screening activity is considered an in-house check.  When an employer performs its own employment screen activities, these activities are not federally regulated. 

Many consumer reporting agencies are available for performing employment background checks.  Conduct an internet search with the search terms “background checks.”  The search result will provide you a vast number of agencies with websites, which will perform background checks for a fee.  It is up to the Internet searcher to devise a means of verifying the information that these agencies provide.