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Rebuttal: Why Background Checks on Real Estate Prospects Don't Work

June 25 2018

On June 21, RE Technology published an article by Lee Goldstein of Real Safe Agent that called into question the efficacy of background checks, with a specific focus on the application of such by real estate agents seeking to use information as an additional safety tool. This rebuttal, by James Reilly of red violet and FOREWARN, explores the weaknesses of the original author's evaluation of background checks:

safety stop silhouetteAccording to the National Highway Traffic Safety Administration, if you buckle up in the front seat of a passenger car, you can reduce your risk of a fatal injury by 45 percent. If seat belts are not 100 percent effective at saving lives, then they are rendered unusable and ineffective, and give a false sense of security, right? We should all immediately stop wearing them, right? Of course not.

Debate around real estate agent safety is a good thing. The fact that there is ongoing conversation about safety protocol, exploring the strengths and weaknesses of varying tools and techniques, means that this important topic stays fresh in the minds of the men and women who, unfortunately by the nature of their business, have inherent risk due to the need for personal engagement with individuals about whom they have little to no knowledge.

Unfortunately, the dispersal of information that is rife with inaccuracies, false and misleading conclusions, and reckless recommendations is, in my opinion, not only careless but grossly negligent. Anyone involved in real estate owes it to their fellow industry professionals to shoot straight. The referenced article strayed well from the mark.

As the only instant identity verification and criminal record indicator specifically designed for the real estate market, we (FOREWARN) take issue with the author's claims and associated conclusions and thank RE Technology for allowing us the opportunity to respond.

AUTHOR'S CLAIM: Through creative wording and misleading isolation of data and comparison, the author represents that the Department of Justice feels that commercial background checks are ineffective.

FACT: Virtually every government agency utilizes commercial databases as part of any investigative endeavor. Additionally, companies across America use commercial databases to power various forms of background checks in their daily workflow.

AUTHOR'S CLAIM: Of the 10.7 million arrests in 2016, only 1.4 million had a final disposition, which is required for a record to show up in a commercially available criminal background check.

FACT: The statement that commercial criminal databases only have records with a final disposition is FALSE. This claim demonstrates perhaps the single greatest piece of evidence that the author has no background in the investigative data industry or that he intentionally presents manipulated numbers and statistics as facts, tying them together to create a false narrative around criminal coverage. A quality investigative resource will show arrests soon after they occur, regardless of whether there has been a final disposition.

AUTHOR'S CLAIM: There is a 30 percent error rate of instant background checks due to spelling of names, and errors in DOBs and data entry (implying that they are useless).

FACT:  Variances and human errors in data entry do NOT render industry-leading information solutions ineffective or unusable. Anytime humans are involved in the collection and input of data, certainly there are chances for errors. A quality data provider accounts for these errors through highly technical data fusion processes and algorithms that result in not perfect, but highly accurate matching. High quality criminal record repositories, coupled with advanced data science practices, provide highly effective insight for a multitude of use cases, including screening individuals before face-to-face engagement. Further, the author limits evaluation to criminal records. Background screening of prospects also allows the verification of identity to ensure the person an agent is engaging with is who they say they are.

AUTHOR'S CLAIM:  The use of criminal background checks poses a legal issue. The author cites the Supreme Court for the proposition that "the use of background checks may be a violation of the Fair Housing Act."

FACT: By making these blanket statements with no further color, the author is extremely disingenuous. Organizations around the country use background checks every day without violating the FHA. It takes more than just a background check to violate the FHA. It takes a subsequent action that results in discrimination in the sale, rental, or financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status or disability (of which persons with criminal records are not a protected class under the FHA). To be clear, it is never okay to engage in discriminatory practices of any kind. Verifying a person's identity and understanding risk factors such as a criminal history to ensure one's safety is not the same as taking discriminatory action against a person because of their race, national origin or other protected characteristic. I think it's fair to say that the author would not have used this red herring had he known that FOREWARN is actually used by Housing Authorities.

AUTHOR'S CLAIM: Only 37 percent of people charged with rape had a previous felony conviction at the time they were arrested for rape the first time.

FACT: 37 percent of people charged with rape had a previous felony conviction at the time they were arrested for rape the first time. Even if the author's isolated statistic was the whole story, I'm confused as to how this supports his false narrative. In fact, the statement alone demonstrates that 37 percent of those charged had criminal records that could have found through a background check prior to their next assault. But consistent with the author's theme of disingenuous presentation of information, the same cited source (Rape, Abuse, and Incest National Network) goes on to report that MORE THAN HALF of all alleged rapists have at least one prior conviction of rape, robbery, and/or assault and battery.


Not properly and comprehensively addressing agent safety can be catastrophic. In September of 2014, Beverly Carter, an Arkansas-based real estate agent and mother of three was murdered by individuals posing as prospective home buyers. "If Mom had been alerted on inconsistencies in the callers' story, she would not have handled that appointment the same way," says Beverly Carter's son and Founder and Executive Director of the Beverly Carter Foundation, Carl Carter, Jr. "With an application like FOREWARN, she would have immediately known that the spoofed phone number didn't match who they claimed to be. With more information at her fingertips, she would still be alive today."

As executive management of a public company that provides information solutions to many industries, including real estate, I make no claim that I'm an unbiased voice. But through almost a decade of work with investigative data, dealing personally with law enforcement, other government agencies, and corporate and private investigators, I've been immersed in the world of, and the use of, commercial databases for risk mitigation and fraud prevention. As such, I emphatically believe that real estate agents should be armed with as much knowledge as possible.

There is no single solution to the issue of agent safety. A comprehensive protocol of both tools and processes are needed at the agent, agency, and association level, to make a substantial impact on the safety of the professionals that are at the heart of making this industry thrive. Whether it be through FOREWARN or another information provider, the use of data to "know your customer" should be an essential part of that safety protocol for every agent across the country.

The author seems to believe that unless a risk mitigation tool is 100 percent effective, agents are better off walking into engagements blind. I don't agree. Use your seatbelt.

James Reilly is President of red violet (NASDAQ: RDVT) and FOREWARN.