Background Checks on Clients
Most companies don’t hesitate to perform a
background check on a potential employee, but what about your clients?
It only takes one bad client to make you wish you had known ahead of
time that you were taking on a bad risk.
Here are some tips for large companies, small businesses and even
independent contractors to stay informed on the people they are working
with.
1. A signed contract with an illegitimate client may be non-enforceable.
In this case, you sign an agreement to supply a set amount of services
to your client for a set fee. If you deliver the services and do not
receive payment as per the contract, you would normally proceed to
collection efforts. However, if your client used a false name, a false
company name or provided you with other incorrect information, it may be
impossible for you to enforce the contract. This is a problem area that
many people overlook.
To avoid this problem, write a clause into your contract stating that
you will run a background check on your client, stipulating that if they
sign the contract, they are agreeing to allow you to perform this check.
You will also need to collect their social security number and their
full name to ensure that you will get the most accurate results from
your check. Once you have this information, run a background search on
the client to confirm their identity and to make sure that they are not
trying to hide something from you.
This works quite well for independent contractors who deal with several
new clients on a yearly basis. Many contractors end up with clients who
refuse to pay, or disappear after receiving the services. This will help
them avoid this problem.
2. Run a more comprehensive search. It is a good idea to start with your
client’s state of residence, but you can receive more accurate results
if you combine this option with a nationwide search. Clients that
continually break contracts will leave a trail, and it may be
nationwide. This will give you the ability to get a better idea of the
person you are working with.
Relevant information such as litigation proceeding, lawsuits filed,
criminal reports and arrest records can be returned with a background
check. This is the exact type of information that can assist you in
learning more about your client. In the event that you have been
supplied incorrect information, the background check should indicate
this problem and may even supply you with other known aliases.
Your time, effort and money are too important to waste on a client that
has no intention of paying you for your services. By taking the time to
make sure that you know who you are dealing with, you can save resources
and money, as well as one of your most important commodities, time.
Back to Background Check Overview