How Do Criminal Record Checks Work in India?

How Do Criminal Record Checks Work in India?

July 25, 2022
6:56 am
background verification, Criminal record check, verification

Not everyone carries a criminal record. However, for an organization, it is vital to have a complete background check, especially for criminal record checks. Before hiring an application, a thorough background check is done, including a search of the applicant’s public criminal record. The criminal background check process involves looking through numerous publicly accessible documents to learn about the applicant’s criminal history. Examining court documents from civil and criminal cases is part of criminal record checks in India. Data that has been made available to the public by the courts are used for this. It all comes down to checking the person to see if they have ever been in trouble with the law. This background check is a crucial component of the pre-employment process. As a result, it guarantees a secure system within the administrative structure.

In India, there are different places where a criminal background check is done. Some of these are:

The District Court and the Supreme Court of India are publicly accessible with web databases to check criminal charges of an employee. A complete public criminal record check is unavoidably required to guarantee a safe workplace devoid of criminal intent. By performing a criminal background check, you can be confident that you are recruiting applicants with a clean record. It also entails looking through the Litigate database. A search of the Litigate database will reveal whether a candidate’s name is included in a private or public database, such as a criminal or law enforcement database.

Why is it necessary?

It is vital to conduct a thorough criminal background check to keep the workplace secure. In other words, anyone hired for any position must have a spotless past. To be sure, the employer does a background investigation. The organization searches pertinent databases involving the candidate’s name in civil action, regulatory compliance, and criminal activity.

In addition to conducting a background check in India, it is vital to scan the global database to see whether the candidate has any connections to any crimes or offenses.

It is crucial for an employee to send verified documents to the hiring department for the smooth functioning of the process.

The Law About Criminal Background Check

There is no specific law in India that mainly addresses criminal record checks or inquiries into criminal histories. However, while checking criminal histories, the Indian Contract Act and Information Technology Acts of 2000 and 2005 were cited as standard laws. The Credit Information Companies (Regulation) Act of 2005 imposes sanctions on businesses that fail to maintain the confidentiality of the personal information they acquire about their personnel.

How do government agencies conduct a criminal background check?

The public records of the State and Supreme Courts and district magistrates are the ideal resources government entities use to access databases they need before hiring employees. Most private and public organizations also confirm litigation-related information. They go to the National Crime Research Bureau and the CBI to check the candidate’s name on the most wanted list. Search the SEBI database, the Central Vigilance Committee’s roster, and the RBI database.

However, the verification process doesn’t start until the candidate has given their written authorization. As required by law, the government agency needs to question the nominee.

Deciding the Type of Background Check Needed

An applicant’s credit history, criminal history, and employment history are all checked as part of the background investigation. The profile and nature of the job will determine this check.

Other than that, many organizations prefer to check social media activities too. Another significant source of background checks in India is social media scanning. Prospective employers can map potential job applicants’ affiliations, tastes, and actions. In layman’s terms, the process allows talent scouts and recruitment firms to indirectly investigate criminal history and better understand their nature without spending time directly with them. In a large nation like India, the precautions mentioned above help ensure a thorough background check. However, authorization from the candidate is still required for screening medical, financial, and other essential data.

How to Get the Police Clearance Certificate (PCC)?

An individual may obtain a Police Clearance Certificate (PCC) from the Indian Police or another duly appointed Indian government representative. The certificate helps to check any criminal records associated with a person’s name and issues a clearance certificate if they are clear. Like other criminal background checks, PCC is also a part of it. Indian or international nationals who reside in India or have previously done so may need a PCC. There are numerous reasons why PCC would be necessary, including:

A period of validity is not endorsable on an Indian PCC’s certificate. However, it is valid for six months, depending on the application’s authority.

What happens if there is a criminal background?

If the hiring agency finds that an applicant has spent 48 hours in jail, the authorities have the right to suspend the hiring. The agency also has the right to give serious consideration.

Later, the issue will be considered, and the agency’s answer will be reflected in its activity. It can terminate the profile or give it new life.

Hiring a Professional Criminal Record Checks Organization

No matter how big or small the organization is, it is vital to have a criminal record check. It is a crucial step to excluding those with criminal histories who pose a danger to the organization.

The expert team at MIMOIQ is dedicated to offering all types of criminal background checks per your company’s requirements. The company recognizes the value of criminal background checks and ensures they are accurate, reliable, and comprehensive. For any organization, the background check of an applicant matters the most. Depending on the position and business, various services may be part of a background check. A potent combination of services, including geo-tagging, quality management, and real-time data transmission, assures the validity of the data. It gives you a thorough overview of the subject’s background.

Various parameters are considered, and more than one kind of criminal history check ensures accurate results. Services are included under background checks:

Financial Verification

The financial background check services offered by MIMO can assist you in reducing the risk of fraud. MIMOIQ helps you with checks to determine customers’ credit and financial viability by providing tailored solutions.

Verification of Address

It is now easy to verify the address of your candidate with MIMO’s address verification services. The team confirms the information provided by the candidate by physically demonstrating the address using the extensive network and modern verification tools.

Using social media to confirm

72% of companies use social media to screen applicants throughout the hiring process. Employers can quickly map a prospect’s interests and affiliations on social media with the aid of MIMO. The company has a team of specialists who know what to look for.

The appropriate level searches public records. The applicant’s address, nationality, or designated jurisdictions determine which countries are searched. We also check the police records in the candidate’s new area if they move to another state or region. MIMOIQ also uses a technique for conducting criminal background checks where they look up information from different sources of databases and look at news articles.

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Digital Identity Verification and Document Verification to Know Your Customer

Digital Identity Verification and Document Verification to Know Your Customer

July 18, 2022
8:58 am
background verification, Digital identity verification, document verification, kyc, verification

Document verification is important when onboarding new customers, depending on the type of bank you are running. KYC checks are now the norm in every industry, online and offline, no matter your business. Every business wants a long-lasting relationship with its clients, and every relationship begins with trust.

Document verification is the first step to creating that trust. Verification is crucial for businesses to guarantee that legitimate client accounts aren’t compromised and that they aren’t placing themselves at risk of fraudulent transactions. Customers also need to have equal trust in the company or bank. The initial stage in developing this trust is digital identity verification. Customers are more likely to return for additional purchases if they believe the procedure is fast, accurate, and secure. Additionally, businesses may concentrate on other tasks, like offering the most excellent experience possible, if they are convinced that clients are who they claim to be.

Why is Digital Verification important?

Customers may lose control of their accounts if the documentation is submitted without notice and have money spent without their knowledge if their credentials are stolen. As victims learn the full depth of the problem, the effects of ID compromise can endure for months or even years. For instance, there are cases where victims receive calls from creditors from banks stating that they owe money and will have to face strict legal action. Deplorable document verification systems can help lower this risk by streamlining businesses to identify and thwart fraud before it gets out of control

Meanwhile, fraud and identity theft can cost businesses money because consumers may switch to more secure rivals or find the company’s inadequate data protection. Some of the reasons why electronic identity verification matters include:

Help to Prevent Fraud

Digital identity verification reduces discount abuse and increases the ROI of customized offers. Discount fraud is observed by businesses using identity marketing initiatives more than before.

Numerous businesses that provide students with personalized offers often compromise email addresses to confirm eligibility, which is quite a serious act. After a few years, many of the graduates still carry these email addresses. Utilizing faulty email address verification also restricts your audience because more than 40% of college students never received the wrong email address. Creating false email addresses is also simple, and many businesses lose money to fraudsters who do that. But digital validation is effective.

Help to carry out long-term relationships

Thanks to digital verification, customers are more likely to return when a procedure is quick, trustworthy, and secure. Contrarily, ID procedures that take too long are erroneous; keeping users in the dark about their status in the procedure or what will happen next will thwart efforts to forge reciprocal connections.

Respect Customer Privacy

Customers are concerned about the security of their personal information, and cases are growing in huge amounts. 4 out of 5 customers prefer not to do business with a company that doesn’t follow the right verification method and has faulty privacy practices. By requesting only the most basic personal information, digital verification protects their privacy. More than two-thirds of consumers are willing to share their name, birthdate, email address, and physical and mailing addresses for a personalized offer.

Privacy must be respected when implementing an identity marketing program that targets college students.

Helps in Boosting Operational Efficiency

Through automation, reliable digital identity verification tools help to increase overall productivity. The correct tools can decrease the need for manual review of PII and boost overall decision-making speed without compromising security by utilizing complex data analysis and comparison algorithms.

Increase the Confidence of Consumers

Customers are frequently eager to give businesses access to their personal and financial information to ease friction and speed up transactions. To avoid having to enter their credit card information each time they wish to make a purchase, users can, for instance, allow a website to remember it. Customers who find it comfortable can feel more at ease with the process thanks to secure and open digital verification services that reduce the overall time and energy spent reviewing documents and details manually.

Different Types of Digital Identity Verification :

Knowledge-Based Authentication

Knowledge-based authentication (KBA), which asks for an answer to security questions, confirms a person’s identification and general information sent. These questions are generally made straight for the person answering them but challenging for everyone else. Like “Who was your favorite teacher?” or “Which pets do you love?” A further precaution for KBA is the necessity to respond to the questions at a specific time. The fact that KBA is the most user-friendly verification method has the most advantage. However, the drawback of this method is how simple it is to find solutions through social networking

Two-Factor Authentication

In this type, the customer enters a code given to their email or mobile phone as part of two-factor or multi-factor authentication. Today, many online services use the verification technique; consumers may easily recognize and comprehend how to utilize it. You may quickly confirm a customer’s email address and phone number with 2FA or MFA. The process is critical; you need to be sure your consumer did not enter their info improperly.

Users need to provide their identification, commonly referred to as a token, along with the regular username and password when using the two-factor authentication.

Credit Bureau-Based Authentication

In the credit Bureau- based authentication, data from one or more of the credit bureaus are collected. The data involves name, address, and social security numbers. These are an important part of customer verification.

Credit-based authentication establishes a certain match of customers without jeopardizing the data for business benefit. However, for young people and new immigrants with thin credit files, it might not match.

Database Methods

Database ID techniques help check an individual’s identity card using information from many sources. Since the method helps assess the overall risk for the user, there is no need for manual reviews. Due to the prevalence of fictitious online identities, this method’s biggest drawback is that it doesn’t guarantee that the person supplying the information is also the one carrying out the transaction.

Online Verification

Artificial intelligence, machine learning, and human assessment are a few methods used in online verification to establish whether a government-issued ID belongs to the users. This verification technique often asks users to upload a photo of themselves holding an ID to confirm that the person on the ID is the same. Online verification is highly secured and is now followed by every other website. Still, some users find having to provide a photo of their face and ID to be a hassle or an invasion of privacy.

Biometric Verification

Based on bodily traits, biometrics helps in identifying and authenticating people. Facial recognition, iris, voice recognition, retina scanning, and fingerprinting are all examples of biometric technology. Customers who use these techniques will find them quite convenient because there are no passwords to remember or questions to respond to.

Using the Best Digital Identity Verification Service

It is best to connect with professionals to make the best use of electronic verification identification through modern tools. MIMOIQ is the leading company that deals with background checks and identity verification for NDFC, banks, and e-commerce companies. With the nationwide coverage, the company uses professional and agile technology, including geo-tagging, online data verification, and others

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How is Customer Profile Validation/Field Verification done in the Banking and Finance Industry?

July 13, 2022
8:23 am
background verification, banking industry, customer profile validation, kyc, verification

There has been a massive change in customer onboarding and field verification processes in the past few years. Customer profile validation is an important part of easy onboarding and ensures the customer has a clean profile. Also called Customer Due Diligence, it is the procedure for gathering and confirming customer information. It includes the client’s name, address, and other private information.

When creating a business partnership, companies must perform CDD or field verification. For instance, a bank or trading platform might need to look up the person’s passport before allowing a consumer to open an account and make a deposit. In this article, we will check how profile validation/field verification is performed in the banking industry. But before that, let us check on customer profile validation.

What is Customer Profile Validation?

The bank performs credit card, KYC, and retail asset product validation. It is the critical stage of the product development process.

The process helps to examine customer problems, the target market, and the banking product. After the validation process, the product can be iterated upon to discover the ideal market fit. Additionally, validation links the product with potential customers and paves the way for developing useful items consumers desire and need. These products include personal loans, auto loans, business loans, education loans, commercial vehicle loans, loans secured by real estate or mortgages, and home loans.

What is Field Verification?

A vital step in a financial institution’s risk and credit approval procedure is field verification, also referred as contact point verification (CPV), background verification (BV), or field verification (FV). It enables the independent verification of important details about current or potential customers through in-person visits and other necessary due diligence procedures before establishing a banking or lending relationship.

When does the Customer Profile Validation take place?

The process of field verification should happen as early as possible in the banking system before a product team spends a lot of time and money developing a new product, of course. Your theory doesn’t need to be accurate. It only needs to be specific enough for you to know who you might want to talk to, what difficulties they could be having, and how your product might be able to help.

Steps for Customer Profile Validation/Field Verification

Since we have covered what customer profile validation means and why it is important, let us check the steps involved in doing the job perfectly.

Verifying the Customer

The first step in customer due diligence is gathering basic details about the client. Whether this customer is an individual or a business will determine the necessary list of data.

Confirming a person

Depending on the jurisdiction, you may need other details, but the following provides a standard starting point for identifying people:

Full name, home address, government-issued ID, and tax identification number.
Banks can use these documents with the customer's photo supplied by a responsible third party to confirm the identification of a customer. It could be a passport or an ID card.
Banks can use recent (up to six-month-old) energy bills, municipal taxes, and bank account statements to confirm a customer's residential address.

Verifying the company

Field verification isn’t limited to customers only; banks also need to do company verification. Businesses must ask for and confirm specific information before partnering with other organizations. While the detailed list can vary between jurisdictions, the following is a common starting point:

The objective of taking these steps is to learn about the company’s beneficial owners. These people control over 25% of the corporation, directly or indirectly, or through other means. It is important to verify beneficial owners after being found.

Banks usually demand certified copies of the paperwork confirming the company’s legal foundation and the records showing all shareholders before lending over the loan or opening an account.

Choosing the right Customer Profile Validation Track

Banks can select between regular, enhanced, and simplified due diligence depending on the customer. For instance, a bank can still onboard a customer if it knows they are a public official (a PEP), but an extra check is required.

Ensuring Security when Having Profile Validation

Fraudsters have been known to send legitimate documents and even dark net selfies. Since there hasn’t been any document tampering in this instance, even the most trustworthy verification systems won’t find anything odd. Businesses can add a second facial biometric check-called liveness to prevent thieves from onboarding clients remotely. This check guarantees that the identity of the genuine document holder is verified.

Things to Remember in the Customer Profile Validation Process Conducted

Let us check some things the individual should know while conducting customer profile validation:

Mandatory

Mark the field under “Mandatory,” preventing it from being left empty. A star (*) symbol will appear next to the field name and any required fields. Incomplete “mandatory” fields prevent managers of content from saving entries.

Uniqueness

Unique marking helps in preventing the duplication of the content in the document. The validator will ask the user to alter the duplicate value each time they enter a previously entered value into a field that is meant to be unique.

Number of characters

Setting up the character restriction will ensure that users only enter the text that fits inside the field’s maximum or minimum character limit. For instance, if you wish to add a “Password” field to your website, you should specify the limit for the cell. The number of characters validation criterion is useful in this situation.

Types of Customer Profile Validation

Also known as data validation, different procedures ensure all the data included is accurate. Some of the types of data validation are:

Data Type Check

In this type, it is checked if the right data type is included in the document. If so, the system should reject any data that includes additional characters, such as letters or special symbols. A field, for instance, might only accept numerical information.

Code Check 2

A code check verifies that a field is chosen from an acceptable list of values or that it adheres to specific formatting guidelines. For instance, comparing a postal code to a list of legitimate codes makes it simpler to confirm if it is valid. Another element is the country code.

Format Check

Numerous data kinds adhere to a predetermined format. Date columns with a set format, such as “YYYY-MM-DD” or “DD-MM-YYYY,” are frequent use cases. Maintaining consistency over time and across data is made easier by a data validation process that ensures dates are formatted correctly.

Check for Consistency

A logical check verifies that the data entered is logically consistent. An illustration is determining whether the delivery date for a package is later than the shipment date.

How MIMOIQ is providing profile validation services all over India to NBFC and banks

MIMOIQ is the leading on-demand customer validation and last-mile delivery service in India. We undertake a complete tech-enabled customer validation service, concentrating on different cities from Tier 1 to Tier 4.

To ensure data validity, we employ skilled task associates and real-time monitoring technology, including geo-tagging, quality management, and real-time data transfer. Our service is not limited to customer profile verification but we offer document collection and verification services to NDFC and top banks in India.

Conclusion

The banking industry keeps updating its data on customers to ensure there is no fraudulent activity in the process. KYC, or customer profile validation, is now part of the customer onboarding process by banks. If you are entering the banking industry or financial services, then learning about field verification is a part of your job.

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What are the KYC Procedures for Merchant Onboarding?

What are the KYC Procedures for Merchant Onboarding?

June 8, 2022
7:01 am
due diligence, Kyc procedures, Kyc verification, merchant onboarding, payments, verification

The merchant onboarding process is at the core of the payments industry, its effectiveness either enabling or inhibiting growth for businesses in this soon-to-be $2-trillion market. The global payments sector is rapidly evolving, with legislative changes, macroeconomic developments, and fintech’s push into the payments industry that is posing problems and opportunities.

As payments companies negotiate the industry’s challenges, they are all affected by the digital change that is sweeping financial services. Customers and merchants have grown accustomed to faster, more convenient service, prompting payment providers to invest in digital infrastructure upgrades to gain speed and flexibility. Meanwhile, new businesses are emerging onto the market with unprecedented speed.

When onboarding merchants, certain risks must be addressed, such as fraud, excess chargebacks, money laundering, tax evasion, and so on. Regulatory guidelines and applicable regulations compel us to take a number of preventive measures, including Know-Your-Customer (‘KYC’) and merchant due diligence procedures, in order to achieve this. As a result, we conduct a series of checks for merchants that begin before onboarding and last until the conclusion of their engagement with us. Financial service institutions or any other businesses who want to onboard merchants onto their platform can use the techniques described here to comply with guidelines and mitigate risk.

What is KYC?

When a client attempts to open an account or on board with a regulated financial institution, such as a bank, a private bank, or an investment company, KYC is conducted (e.g.: the KYC process you undertake when opening a bank account). An individual or a legal entity can be a client. The goal is to verify the client’s identity, address, and legitimacy through crucial document verification. When combined with due diligence and other mandatory tests, these allow us to identify possible fraudsters, and shell corporations and detect money laundering, among other things. Non-regulated enterprises, such as an online marketplace, are frequently required to conduct a full or partial KYC as a precaution. These enable us to secure ourselves and our end customers and the financial system as a whole.

The Complete KYC Procedure

The KYC document check, also known as the Customer Due Diligence Check, is in the initial stage. Individual KYC and Business KYC are two types of KYC that can be used:

Step 1: The KYC document check or CDD process

Individual KYC: We do a ‘KYC’ process, or CDD for an individual, when you are a merchant who is an individual (e.g., a sole proprietor). In general, we check your identity using an OVD check (identity documents such as Aadhaar, passports, driving licenses, and so on), individual PAN verification, and, if applicable, current address proof check (utility bills, etc.). We can also request additional documents to confirm your financial or company position, such as your business registration documents.

Business KYC: When we are on-boarding a business partner, we perform a Business KYC procedure, also known as a CDD for a business. The OVD check is replaced by an ‘entity-proof’ check in this case. This, too, varies depending on the type of legal company you are. If you’re a company, for example, we’ll need to verify your certificate of incorporation, memorandum and articles of organization, and other documents. If you’re a trust or partnership, we’ll need your trust/partnership deed, registration certificates, and other documents.

Step 2: Check for sanctions and PEPs on the sanction and PEP lists.

The names of our clients and their beneficial owners must then be checked against specified lists, such as national and international terrorism lists, or lists of “Politically Exposed Persons.” We must also notify the Financial Intelligence Unit of India (‘FIU-IND’) if a name appears on a sanctions list. We also check blacklists, greylists, and defaulter lists for firms, directors, and other individuals issued by banks, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Enforcement Directorate, the Office of Foreign Assets Control (US), and others (for a detailed list please see Appendix II below). These checks help us combat terrorism and money laundering, as well as determine risk thresholds for individual clients.

Step 3: Merchant screening and onboarding policies

Following that, we do a background and antecedent check in the form of an initial screening, for which we establish an internal merchant Onboarding Policy. The purpose of this step is to confirm the nature, purpose, and legitimacy of a potential client’s business. To determine business legitimacy, we conduct a variety of checks, including licensing/registration checks, credit checks, profit and loss statement checks, balance sheet reviews, and so on, based on information we obtain directly from the prospective client, as well as publicly available information such as the merchant’s websites, product listings, end-customer reviews, social media activity, and so on. We must additionally check for PCI-DSS compliance because it is mandated by law.

Step 4: Merchant profiling and levels of diligence

Following these preliminary assessments, we must categorize merchants as low, medium, or high risk. Based on this, we determine the levels of due diligence and post-onboarding monitoring we do; for example, we need to conduct enhanced due diligence for PEPs but simpler due diligence for self-help organizations. We’re also barred from doing business with some industries (tobacco, hacking, gambling, weapons, and so on), while others are considered high-risk (pharmaceuticals, matrimony, gaming, security brokers, jewelry, and so on), necessitating more scrutiny and caution.

Step 5: Continuous due diligence

Following onboarding, our due diligence procedures will continue to monitor any suspicious changes in merchant behavior. A change in the merchant’s website details, for example, or an unexpected display of high-risk products, could suggest fraud. These circumstances may necessitate a review of merchant risk profiles and due diligence levels.

Step 6: Keep track of your transactions

We monitor merchant transactions as part of our onboarding process to look for any potential red flags, such as differences in expected transaction characteristics. Expected total transaction volume, average order value, chargeback frequency, and so forth are examples. For instance, if a merchant exceeds the maximum transaction limitations, exhibits a strange refund pattern, or receives frequent end-customer complaints, these are all red flags. Regulated entities must report any suspicious transactions (such as those that raise money laundering concerns) as well as transactions above specific thresholds (e.g., cash transactions over Rs.10 lakh, cross-border wire transfers surpassing Rs.5 lakh) to the FIU-IND.

Step 7: Requirements for record-keeping and internal governance

Then, for at least 5 years, we preserve records of all merchant transactions and identity documents. These must be made available to the authorities upon request, such as in the case of an investigation. Internal governance demands such as dedicated internal committees, internal audits, periodic risk assessments, and proper employee training are also in place to ensure effective implementation of requirements. A Designated Director and a Principal Officer must also be selected, as they have specific reporting responsibilities under the PMLA.

Step 8: Updates on a Regular Basis

Finally, both merchant risk profiles and KYC must be updated on a regular basis. It is required by law to update merchant KYC every 10 years for low risk, 8 years for medium risk, and 2 years for high risk. This is also aided by the continuous due diligence checks.

Final thoughts:

Merchant onboarding is beset by the same age-old regulatory, trend, and competition issues that hamper the payments industry as a whole. Where once the industry dynamic was split between large retailer’s competitive margins and smaller merchant’s regulatory issues, the spectrum has now expanded to embrace the rising marketplace economy. Because everyone is a merchant in today’s environment, merchant onboarding volume, and transactional volume are both lucrative and hard. The marketplace economy has created a risk and regulatory gap, which is being navigated by a subset of creative payments organizations.

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Best Practices for Managing and Improving Merchant Onboarding

Best Practices for Managing and Improving Merchant Onboarding

May 30, 2022
11:40 am
identity verification, Merchant KYC, merchant onboarding, payments, verification

The recent global health crisis has had an influence on a wide range of industries and geographies, not least the payments industry, which has seen an unprecedented transformation. Consumer purchasing habits have evolved to online shopping for products and services, resulting in the requirement for faster onboarding and better continuing merchant monitoring to reduce fraud and compliance risk for merchant acquirers.

When it comes to onboarding new merchants, automation is critical in order to make a smooth transition from the previous time-consuming approach to a slicker, faster process that reduces friction for the new merchant. But what steps should merchant acquirers take to guarantee that they are prepared to meet this new challenge of changing the customer experience while limiting risk?

Automation of underwriting processes

It is critical for acquirers to provide a smooth merchant onboarding experience for their customers. With the epidemic hastening the general public’s shift to a more online approach, new smaller digital-only merchants are popping up all the time, with low margins and a need to be up and running quickly; for them, a swift onboarding procedure is vital.

Before an underwriting decision can be made, the normal merchant onboarding process comprises a number of phases that must be completed, as shown in the creative below. This is typically a 3–5-day process. This process is too protracted, as previously said, given the current climate and the unique terrain of online-only micro-merchants.

Digital automation can shorten the time it takes to underwrite a new merchant from days to minutes. However, if not done appropriately, this speed in decision-making can come at the expense of risk management and have a detrimental influence on the acquirer’s profitability.

Collecting data that is both actionable and objective

Effective onboarding decisioning requires access to meaningful and objective data. To enrich their perspective of each applicant, merchant acquirers should use a combination of their own data, third-party data, and assessment services. The best strategy is to combine application data with external data from a growing industry of data suppliers who can provide essential insight and assessment on topics like bank account validation, email addresses, IP addresses, device IDs, and negative hotlists. Internal data from various sources is ingested, which eliminates human data entry and reduces judgmental underwriting decisioning while also ensuring consistency.

Using analytics and algorithms

Acquirers should not only have precise and objective data, but they should also be able to analyze it using analytic models and procedures. The tools should allow the acquirer to import models, scorecards, trees, and tables, and they should be completely user-configurable. Acquirers frequently have historical data about applicants in addition to external data, but it is inaccessible owing to the sprawl of data. Rather than going through the pain of trying to centralize all referential data in a single data store, design a solution that allows you to take data from multiple sources and retrieve it when you need it.

Effective risk management, tracking, and learning rates

Risk management should not be the primary consideration for merchant acquirers and their merchant customers during the onboarding process. Merchant acquirers’ portfolios have become riskier as a result of increased digitization and demand for innovative payment options. As new entities pop up and enter the system at breakneck speed, the barrier to entry into the digital/ecommerce economy has increased. Validating these new entities necessitates the use of more robust systems that can make use of both internal and external data.

Acquirers should improve their ability to manage fraud and compliance risk by evaluating possible collusive or fraud-targeted merchant behavior, the chance of merchant attrition or insolvency, and current and prospective merchant profitability.

There is an increasing requirement for merchant monitoring in real-time in order to spot aberrant merchant behavior in time to prevent losses. We also find a lot of value in linking pre-book (onboarding) performance/results with post-book (monitoring) outcomes in order to establish a faster learning loop and enhance both areas. In reality, many acquirers are looking to meet both of these demands with a single platform/capability to improve insight sharing.

Ensuring that merchant monitoring methods are comprehensive

Risk management is a continuous necessity that does not end after a merchant is onboarded. The world of business moves quickly, and many businesses, particularly smaller, more flexible ones, must pivot or alter their course quickly to stay competitive. Their consumer profile may alter as a result of these developments. As a business grows, a merchant may need to expand into new markets or adjust the way they accept payments to accommodate a greater range of card types and payment methods. As a result, their risk profile may shift, leaving your company vulnerable.

Identifying potential changes in a merchant’s sales operations that could influence their risk criteria requires some type of ongoing monitoring. Keeping note of indicators such as surges in sales activity, surpassing payment thresholds, out-of-area or strange sales activities, and altering website products or connections can provide you with an up-to-date image of each merchant you work with and show any potential red flags. Keeping a lookout for their presence on punishment lists, as well as any unfavorable or adverse media coverage, will be essential.

An effective merchant monitoring approach will be automated, leverage cutting-edge analytics, real-time urgency and flexible data ingestion, and be able to proactively alert acquirers to potential risks and double as a competitive advantage for attracting new merchants to their network.

Technology that is 'plug and play'

It’s critical to get your relationship with your new merchant off to the greatest possible start. A quick and flawless automated sign-up procedure can help attract and secure new merchants to your payments firm, but if things go wrong once they’ve signed on the dotted line, all your efforts could be for naught. A key component of the merchant onboarding process is a faster merchant setup. It enables merchants to swiftly deploy the equipment and technology they require to accept payments right now. As a result, this step should be as simple and straightforward as signing up.

Your new merchant will be a happy customer if everything is ready to ‘plug and play’ right out of the box. If it’s difficult to set up and get ready to use, they’ll toss it in the back of the drawer before it’s even used – and your brand’s reputation suffers as a result. As a result, make sure that all of the software, training materials, and other information that the merchant will need to get up and running is preloaded or supplied with the device, so that your new customer has everything they need right away.

Quicker go-live

Because of the ecommerce boom, the introduction of smart technology, and the pervasiveness of social media, today’s consumers demand fast access. This puts pressure on merchants and brands to be available to their customers 24 hours a day, seven days a week, which necessitates collaboration with service providers that can assist them in achieving this high level of service. Merchants, like customers, don’t want to wait weeks for a new potential payment provider to process their manual (or even paper) application. They expect to be up and running in a matter of minutes. Why not a merchant account if they can obtain this level of service with a commercial banking account?

To learn more about our advanced merchant onboarding solutions.

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How MIMOIQ is helping Hinduja Leyland Finance to scale up their Operation-Process.

How MIMOIQ is helping Hinduja Leyland Finance to scale up their Operation-Process.

Here is an example of the tasks and processes that MIMOIQ executes for Hinduja Leyland Finance: Hinduja Leyland Finance offers easy financing options or car loans to customers who are looking to purchase a vehicle.

About Hinduja Leyland Finance

Hinduja Leyland Finance Limited offers loans to customers for commercial and personal vehicles including tractors, cars, and multi-utility vehicles in India. It was incorporated on November 12, 2008, and finances a wide range of commercial and personal vehicles in the primary as well as the secondary market of used vehicles. These include medium and heavy commercial vehicles (“MHCVs”), light commercial vehicles (“LCVs”), small commercial vehicles (“SCVs”), cars, multi-utility vehicles, three-wheelers, and two-wheelers.

HLF’s vehicle finance business has a diversified customer base comprising of First Time Buyers, Captive Users, Retail Operators, Strategic and Large Fleet Owners, Small Truck Owners, and self-employed individuals, who are largely based in urban and semi-urban locations. HLF also finances tractors and construction equipment and provides loans against property. In September 2015, HLF launched their housing finance business through its wholly-owned subsidiary, Hinduja Housing Finance Limited, which focuses on providing finance for affordable housing loans.

Challenges faced by Hinduja Leyland Finance in recovery of loan amount after the car has been picked up.

There could be several reasons for the scenarios mentioned below :

MIMOIQ assists Hinduja Leyland Finance to overcome these challenges by providing and executing a comprehensive audit process for the identification of the vehicle and recovery of loan amount. This task is made easy with the help of their vast network of field officers equipped with cutting-edge technologies.

How is MIMOIQ helping Hinduja Motor Finance achieve their goals?

If a customer avails a car loan from Hinduja Motors Finance and a situation arises where the customer is unable to pay his/her installments for two consecutive months, the car is picked up and sent to a car yard. Our field officers are then activated via the robust MIMOIQ mobile app powered by MIMOIQ’s software solution, TraQSuite. The field officer assigned the task with the data provided by the Hinduja team visits the car yard to verify whether the vehicle is indeed the same vehicle that was registered under that particular loan. This is done by clicking pictures, verifying chassis numbers, vehicle registrations, and also matching the documents available at the yard with the data that the field officer possesses. Once the vehicle has been identified, the field officer then reports back to the client with the required data.

Nationwide coverage with skilled field officers

We create long-term value for the Hinduja Motor Finance Group with our cutting-edge technology and a ground presence of 14000+ field officers. MIMO’s professional field officers are equipped with agile technology that ensures data authenticity, which includes geotagging, negative monitoring, quality management, and real-time data delivery—a robust mix of services and tech to provide an organization with comprehensive constructs required to execute any activity related to audit surveys that include document verification, asset identification, data authentication, and real-time reporting.

Streamlining the Asset Audit Process

The asset audit process for Hinduja Motor Finance is deconstructed into 3 easy steps by MIMO that includes

Asset Identification

This includes verifying and matching the data provided by the client.

Data Authentication

This includes verifying all document-related data and authenticating the information received by the client.

Real-time reporting

Instant updates regarding any development regarding a particular task or activity.

Reduction in Turn Around Time (TAT):

A vast network of field officers across the country ensures reduction in TAT for any task assigned by the client. With MIMO’s ever-growing army of field verification associates, multiple tasks can be assigned, and multiple visits can be executed within a short period of time.

How can this process be used to help other brands?

Organizations with similar standard operating processes (SOPs) can avail of MIMO’s software solutions for Asset and Inventory management, streamlining of asset audit processes, seamless data integration and verification, and the utilization of highly scalable, portable, and easily integrable automated processes.

We create long-term value for organizations with our cutting-edge technology and a ground presence of 14000+ field officers. MIMO’s vast network of professional field officers equipped with agile technologies enables a highly effective and efficient mix of skilled associates and state-of-the art tech which ensures that tasks are completed within a short period of time.

Can CIBIL Score affect your Job Prospects?

Can CIBIL Score affect your Job Prospects?

May 18, 2022
8:43 am
background verification, Cibil Score, credit check, employment check, verification

The credit score is a three-digit numeric number representing a person’s credit history in India. This rating is based on an individual’s credit payment history across loan kinds and credit institutions over a set period of time, as recorded in the CIR. Credit-scoring organizations also notes a person’s payments, late payments, loan terms, and other factors.

Can a person's credit score have an impact on their job prospects?

This practice cannot be guaranteed because certain firms from other industries may examine your CIBIL score and credit record before shortlisting you for an interview. Many firms have begun to focus on an individual’s financial health in order to evaluate numerous human traits such as reliability and honesty, as time has passed.

What Is A CIBIL Score and Why is It Important for Job Seekers?

The CIBIL score is a three-digit figure that ranges from 300 to 900 and is used to offer a summary of your loan and credit card payment history. This report outlines your loan and credit transactions with each bank and financial institution during a specific time period. Simply explained, your CIR is your credit report, and your CIBIL score is the credit ranking you receive based on your CIR’s performance. Your CIBIL score is a good indicator of your financial situation.

Although the CIBIL score’s primary function is to show your credit worthiness, it also aids in determining how financially responsible a job applicant is. Employers used to check a candidate’s CIBIL score only when he or she applied for certain jobs or profiles, but now practically every major private and public employer checks a candidate’s CIBIL score for all types of job openings.

What factors do companies consider when reviewing credit check reports?

In this scenario, it’s important to analyze the employer’s perspective in order to properly understand why CIBIL scores are scrutinized before employing people. The following are some of the most common explanations:

Checking Your Background

A background employment check is one of the legitimate reasons for investigating your credit record or score. A person with a poor CIBIL score, for example, may be perceived as reckless, and his or her talents may be seriously questioned. Companies are known to be hesitant to hire someone with a criminal past; in the near future, an individual’s severely poor credit score may have an impact on his or her career opportunities. As a result, poor credit and employment checks are intimately linked.

Bad Characteristics Analysis

Would you trust someone with a low CIBIL score? Such a person might not be considered a trustworthy employee candidate, and his or her honesty would be severely scrutinized. The employer’s point of view functions and concerns a calm workplace atmosphere in this circumstance.

In any instance, if the firm policy states that they will not hire anyone with a terrible credit record or a credit score below 650, even the most qualified individuals will be excluded from consideration.

High Debt Trap Hampers Performance

Focusing on work becomes tough for someone who has a large debt hanging over his head. Employers who are keen on examining a person’s CIBIL score are fully aware of this reality. Financial troubles have a significant influence on work life, and they can completely derail your ability to deliver the exact outcomes that the employer requires.

Are CIBIL scores checked by all employers and sectors?

Analyzing a person’s credit record is a relatively recent trend in India. Although it is not widely used, it is gradually becoming so in several industries. Currently, only senior-level interviews in the financial and IT sectors are used to test the CIBIL report. What may employers see on a credit check, you might wonder. Employers attempt to obtain a detailed understanding of the candidate’s financial transactions and credit management skills; thus, the response should be yes.

A thorough examination of loans and payment patterns tells a great deal about a person’s nature. There are significant rumors that in the next years, all corporations will require candidates to submit their credit ratings as part of the interview requirements.

What can one do in this situation?

It’s worth noting that the RBI has issued rules indicating that credit reports kept by businesses like CIBIL can only be accessed by banks and other financial institutions. Furthermore, inquiries from other businesses or groups are not considered. As a result, the need to present a CIBIL report in order to secure work is solely at the discretion of the firm giving the position.

Is it possible to acquire a job with negative credit?

If you’re preparing to apply for a job, the first thing you should do is to perform a credit check and obtain reports to make sure there are no red flags. There are a few things you should keep in mind to ensure this:

Repayment History

It is important to ensure that one’s loan/credit card payments are consistent and made on time. This is a major determinant of your credit score and report. Verify that your report contains no payment delays or non-payment penalty.

Borrowing in Moderation

Most individuals aren’t aware of this, however borrowing excessively lowers your CIBIL score. If you have taken a large loan or overused your credit card to the point that your limit is almost surpassed, your credit score may suffer as a result. As a result, it is critical to limit credit usage.

Credit mix

To maintain a strong CIBIL score, an individual’s credit history should include a mix of secured and unsecured loans. If your credit record mainly contains unsecured loans, it may have a negative impact on your credit score.

Loan Requested or Accepted

It’s important to understand that when you seek a loan, a financial institution or bank may request your credit report. As a result, making too many inquiries in a short period of time may lower your score. If you’ve been turned down for a loan or a credit card, wait a long time before applying with another bank.

Resolve Conflict

There may be occasions when, owing to a communication mistake, erroneous information is provided to CIBIL, resulting in a negative impact on your report. As a result, a person should double-check his or her report to ensure that the correct information is being copied. Additionally, to avoid any type of dispute or quarrel, strive to bring it to the notice of CIBIL while also informing your bank of any mishap.

It’s a good idea to monitor your credit report routine. This would provide an opportunity to guarantee that your credit reports reflect well and, as a result, ensure that you do not miss out on future job prospects.

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Here are a few questions you should know the answers to when conducting a Criminal Records Check :

Why is it necessary to run a criminal background check?

To provide a truly secure workplace devoid of criminal intent, a thorough criminal records check becomes vitally necessary. With a criminal background check, you can be sure you’re hiring people with a clean record. This also involves searching the Litigate database. A litigation database check determines whether a candidate’s name appears in any proprietary or public database, such as a civil lawsuit database, criminal databases, and/or regulatory compliance database. Both Indian and international databases can be searched to see if the candidate has any ties to organized crime or has been referenced in any legal proceedings. When a competent professional agency does not do a criminal records check, such offenses can cause irreparable damage to a company’s reputation. According to a study, discrepancies linked to criminal records and references accounted for 19.5 percent of all discrepancies in India in 2016.

To whom should we run a criminal background check?

Every new employee should undergo a criminal background check to ensure that no criminals access your organization. A single inconsistency can have a negative influence on your workplace’s safety, motivation, and brand reputation. A criminal background check is required regardless of the hiring level!

Are there any regulations governing the checking of criminal records?

In India, there is no law specifically dealing with criminal records or background checks. However, for conducting criminal records checks, the Indian Contract Act, Indian Penal Code, and Information Technology Acts of 2000 and 2005 are often used as benchmarks. Companies that fail to keep personal data obtained on employees confidential may face penalties under the Credit Information Companies (Regulation) Act of 2005.

What databases can I use to look for criminal records?

Litigation-related information can also be found via the National Crime Records Bureau and the CBI’s Most Wanted Lists, in addition to district magistrate, state, and Supreme Court public records. The list of defaulters can be found in databases maintained by SEBI, RBI, the Registrar of Companies, and the Central Vigilance Committee’s list of corrupt officials.

How do I do a criminal background check?

It’s critical to seek advice from a reputable firm with access to indexed criminal records and litigation databases. It is critical to inform the candidate that a criminal records check will be conducted and secure his or her written consent before proceeding. In most cases, employers consult with background check companies to do thorough criminal background checks!

What methods do background check businesses use to search for criminal records?

Companies that conduct background checks often scan a range of sources, including local, state, and federal databases, as needed. While there are numerous sources available, the ones chosen will be determined by the exact searches that your prospective employer has requested.

One of the most prominent sources for criminal and offense history searches is state court records. While some municipal courts may make their documents searchable online, around 30% of courthouses require direct access in person. In order to assist in-person courthouse record searches in these jurisdictions, background check organizations execute real-time criminal records searches and maintain a network of court runners. As you might expect, such in-person searches take time, but they allow screening companies to get the most accurate and up-to-date information from the court.

Is it possible to suspend an employee based on a criminal background check?

In India, if a government employee has spent 48 hours or more in police custody, he or she will be automatically suspended. Any offence, including dowry killing allegations, might lead to such detention. Disciplinary committees and policies are established by private companies. After evaluating each case, they can decide on a course of action.

What should you do if you come upon anything negative?

One of the most basic steps in recruiting the best individuals is to run a criminal background check. After a thorough investigation of the applicant’s background, a hiring decision should be made. Before making a hiring choice, it’s a good idea to offer the employee an opportunity to explain the negative finding.

How can the HR manager confirm that the criminal background check on the job application is accurate?

The greatest criminal background checks are those that are accurate, thorough, quick, and obtained legally. The inclusion of criminal background check questions in the job application is the first step in conducting a complete criminal record check.

The checks can take a long time, cost a lot of money, and necessitate a lot of diligence. For interstate and international hires, the problems multiply. The HR manager should not let any financial or time restrictions allow the criminal background records check process to be shortened.

What are the rights of employees/applicants?

The criminal record check report received by the firm may be incomplete or erroneous due to the constraints inherent in the process. To protect the rights of employees/applicants, the law compels employers to give employees/applicants the option to present additional information to substantiate the report’s incompleteness or inaccuracy.

Individuals should be given a copy of the report and given enough time to respond with the requested additional information in the interest of fairness. If the people fail to provide the required information within the specified time frame, or if the information provided is insufficiently persuasive, the company might begin an adverse action procedure while keeping the individual informed. Individuals will then need to seek the respective judicial authorities for dispute resolution if they have any further grievances.

Is there a limit to how far back criminal record checks can go?

Employers can decide how far back they want the search to go, with seven years being the most popular option. Other options include ten years and “unlimited,” which looks for all reasonably available information. After the search is completed, the records that are shown in the report will be determined by how far back the search was conducted as well as any applicable legal constraints. Background check businesses can record criminal convictions indefinitely in most jurisdictions; however, certain states limit the reporting of convictions to seven years.

A number of factors are considered when determining whether a record is within the seven-year timeframe, including the date of conviction, release, or parole. Many screening businesses examine these similar variables, as well as periods of probation when deciding whether to publish a conviction record that can legally be reported indefinitely but the customer has requested a fixed (e.g., seven-year) time limit.

In terms of non-conviction, most background check agencies are unable to report anything older than seven years (such as non-pending records of arrest, criminal case dismissals, etc.). Non-convictions, on the other hand, are not required to be reported in a few states.

Conclusion:

A criminal record check allows you to make an informed decision regarding a candidate’s appropriateness and fit for your organization. Even though a conviction does not automatically disqualify a candidate, you will be in the best position to determine whether their criminal history poses an unreasonable risk to your organization.

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How do Employers verify Education Records of Applicants for Employment: Best Practices

How do Employers verify Education Records of Applicants for Employment: Best Practices

One of the most crucial components of background screening is the education verification process. Regardless of whether they work in a blue-collar or white-collar environment, today’s workforce requires some type of educational qualification. Companies may wish to trust an applicant’s educational qualifications based on the appearance of their documents, which is understandable. However, it is critical to verify any educational claims made by the candidate legitimately.

Market conditions are growing increasingly difficult, prompting people to use all methods necessary to find work. It has been discovered that a substantial number of job applicants are lying about their qualifications in order to seem suitable prospects. Unethical practices such as degree forgery, bogus institutes, and deceptive claims are difficult to detect, necessitating background checks. Every year, India generates between 2 and 2.5 million graduates. With such a large number of degree holders, having strict education check regulations becomes even more vital.

What is an Educational Background Check?

An education background check verifies an applicant’s statements about their schooling. Their attendance and degrees acquired at high schools, colleges, and vocational schools are verified through this process.

Thousands of people may be interested in a great job opportunity. While some are deserving, others can make up a few areas of their resume to fit in. Employers can use background checks to verify a candidate’s training, certifications, and academic history. That way, they’ll be able to spot any anomalies in the application and take appropriate action.

The following are the motivations for conducting an education background check:

An education background check verifies an applicant’s statements about their schooling. Their attendance and degrees acquired at high schools, colleges, and vocational schools are verified through this process.

Identifying knowledge gaps against job requirements:

The people you employ must be qualified for the position for which they are applying. A thorough examination of the candidate’s educational background offers information about the subjects they studied and their relevance to the post.

Protecting against false degrees and diplomas:

Diploma mills, which provide candidates with phony degrees, are on the rise. These organizations provide forged certificates in exchange for money, resulting in educational gaps. These organizations are unaffiliated with any reputable organization or government agency. Rather, they collaborate with independent organizations whose curriculum and standards do not conform to the legally mandated standard.

Verify the authenticity and usefulness of foreign degrees:

Students are increasingly seeking education in other countries. It’s possible that the curriculum in those countries doesn’t exactly fit the job description. Furthermore, as part of the education verification process, the legitimacy of international educational institutions and the worth of their degrees must be confirmed.

How do Employers verify Educational Background of prospects?

Education verification of degrees and diplomas is mainly done in the institutions’ in-house offices. Third-party education check services are also used by companies and institutions because they have their own proprietary databases for confirming the individual’s claims. While conducting education verification, a number of parameters must be checked and validated.

Verifying the name and registration number:

This is essentially an identification verification. By comparing the candidate’s name and roll number to official institute records, it is possible to determine whether the applicant genuinely attended the university that is being claimed.

Verifying course information:

This education verification parameter is crucial since it establishes a direct link between the applicant’s education and the employment role being offered. This entails generating a list of all the subjects the candidate has taken and determining their relevance to the job.

Graduation year:

Because youthful applicants are increasingly sought after by employers, many candidates fake their graduation dates. By contacting the institution provided by the candidate, education verification of graduation records can be simply acquired.

Graduation status:

This essentially verifies the candidate’s quality. Businesses frequently do not prefer candidates with lower grades or drop years. The job’s nature may necessitate applicants with a high level of expertise and knowledge. Candidates may hide their drop years or mislead about their grades. To achieve high-quality recruiting, such inconsistencies should be identified during education verification.

Whether the institution has been deemed fake by regulatory bodies:

As previously stated, forgeries and diploma mills are on the rise. Verifying the educational institute’s legitimacy can assist protect the company from candidates from questionable institutions. This can be accomplished by comparing the institution’s information to that provided by regulating authorities such as the UGC.

Few methods that employers use to verify education records of individuals:

Collaborating with a third-party background check company

Employers’ preferred method of verifying an applicant’s education is to work with a third-party background check company. They can verify an applicant’s schooling records in a fraction of the time that it would take an employer to do by themselves, and they can provide verified information to the employers in as little as a few hours. They can also confirm the applicant’s claimed educational background.

The DIY approach

If an employer does not use a verification provider, education verification can be done manually by the HR department. Contacting the university’s registrar, providing details about the prospective employee, and requesting verification would be part of this DIY process.

A few of the best practices for conducting educational background checks:

Written Disclosure: Employers must notify candidates in writing that they will perform background checks.

Consent: Employers must seek each applicant’s authorization before performing background checks through third-party providers.

Result sharing: The employer must share the results of the background check with the applicant and notify them of their rights and next steps when the vendor completes the background check.

Following steps in the adverse-effects procedure: If an employer learns any negative information that may have an impact on their employment decisions, they must follow the adverse-action procedure. For example, if you discover a discrepancy after doing a background check and decide not to hire the individual, you must send the candidate or employee a final adverse action notice.

Anti-discrimination regulations: Employers must abide by their country’s anti-discrimination laws.

Equality: Conduct a background check on every applicant, regardless of race, ethnicity, color, gender, or other ascribed qualities.

Following local laws: You must follow local laws based on your hiring location.

How can MIMO help?

By partnering with a third-party background screening company, you will be able to receive all the information you need quickly. Working with a reputable background check firm will save you time and money while also ensuring that you remain compliant in the customer screening process.

The simple truth is that recruiting the best personnel is a rigorous competition, and you must be at the top of your game to attract and keep the best. Making the right hiring decisions will have a significant influence on your business, resulting in higher productivity. MIMO offers all-inclusive background check services with a focus on compliance adherence to provide you with the most reliable and up-to-date details.

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What is an Employment Credit Check and Why is it Needed?

What is an Employment Credit Check and Why is it Needed?

An employee credit check is when an employer obtains a copy of an applicant’s or current employee’s financial records in order to have a better understanding of their financial history. What does this mean for an employer or a company as a whole?

Credit checks are an important part of the onboarding process because they reveal how economically responsible a person is, which reflects the attitude they will have toward company finances. Any type of corporate obligation is well-known to be associated with financial responsibility.

Regardless of an employee’s position, the firm must be able to trust them with money, which is made possible by a thorough credit history check.

This is a guarantee to the company that its personnel will not engage in any financial mismanagement, such as fraud or other criminal activity, which would result in a significant loss.

What does a credit check actually verify?

A credit check provides various details about an employee, particularly about his or her financial situation. Typically, an employer will have access to information such as a person’s credit card and debit card debts, payment and default history, details of any late payments, loans, and so on.

A credit default check confirms the employee’s or candidate’s personal details through national ID checks in addition to financial information. This assists organizations in verifying the candidate’s name, age, residence, and other vital information.

Employers should be aware that there is a legislation in India that prohibits anyone from utilizing another person’s credit information, and if someone is found guilty of making adjustments or leaking any kind of credit data, they would face severe consequences.

For employers, it is their responsibility to guarantee that sensitive information about employees or prospects is handled professionally and responsibly. Under no circumstances should they share such sensitive information with a third party or alter any facts.

Why is a credit check required in the recruiting process?

While it is the employer’s job to do complete credit history checks in the best interests of the company, it is critical to understand why a credit check is such an important component of the employment screening process. How you handle finances and the integrity of your entire firm are intertwined in any organization. If an employer hires someone with a history of financial mismanagement, they risk ruining their company’s reputation and brand image.

Why would a potential employer check an applicant’s credit?

The risk is substantially greater, especially if the person holds a leadership position or any capacity directly tied to the company’s finances. Such hazards can be avoided by thoroughly vetting each candidate through credit checks, regardless of their position. Furthermore, a person’s financial management reveals a lot about their attitude, intentions, and personality. Employers can simply flag any credit default situation and understand how responsible their prospects are with a credit check, which can save them a lot of problems in the future.

The credit history of an applicant can reveal potential issues that an employer would prefer to avoid:

Late payments may show that you aren't particularly organized or responsible, or that you don't follow through on promises.
Using a lot of available credit or having a lot of debt are signs of financial instability, which can make you more vulnerable to theft or fraud.
Any indication of mismanaging your own finances could signal that you're not a good fit for a job that requires you to manage business funds or consumer information.

A nationwide poll of 1,528 human resources professionals was conducted by the National Association of Professional Background Screeners in collaboration with HR.com. According to the findings, 25% of HR professionals employ credit or financial checks when hiring for select roles, while only 6% check all candidates’ credit.

How can an applicant prepare for a potential employer's credit check?

When doing a credit check, employers are mostly looking for trends or habits of financial mismanagement, so knowing what your credit report says before applying for any job is the best way to prepare (no matter the position).

You don’t want to be surprised when you apply for a job and find out that something negative is on your credit reports, so job seekers should get a good idea of what their credit reports look like well ahead of time. Also, you must be able to justify any bad entries.

Each of the three major credit bureaus

is required to provide you with one free credit report each year. These reports are available for free, as allowed by federal law. We recommend that you don’t read all three reports at once, but spread them out over four months.

Keep in mind that, while employers are legally allowed to pull your credit history, it is only one of many considerations when applying for a new job. However, there is a simple approach to making your credit report look as nice as you do in your job interview: always pay your bills on time.

What Is Reported in an Employment Credit Check?

Employment credit checks reveal a person’s credit-to-debt ratio and previous bankruptcies, revealing how they’ve handled credit and bill payments in the past—an important indicator for jobs where the employee will be handling or managing money. While employment credit checks do not reveal credit scores, the following information may be revealed:

Current and past employers' names and addresses.
Bankruptcies are disclosed.
Any outstanding bills turned over to a collection agency.
A record of the individual's credit and payment history.
Other inquiries into the candidate's credit history.

How can MIMO help?

Background screening of applicants has become the norm in today’s business world, with practically every company employing some form of background screening as part of its hiring process. It is simple to understand why. A well-designed background screening program will almost likely lower your cost-per-hire by delivering immediate and measurable results.

Pre-employment tests, when combined with modern screening techniques, aid in the speeding up of the recruiting process and the selection of the best candidates for a post. When you hire a new employee, your firm makes several long-term expenditures on onboarding and training. Pre-employment testing is one of the most objective means of determining whether an applicant is a correct match for your organization, as it assesses cognitive capacity, skills, EQ, and communication, among other things.

By partnering with a third-party background screening company, you will be able to receive all the information you need quickly. Working with a reputable background check firm will save you time and money while also ensuring that you remain compliant in the customer screening process.

MIMO offers all-inclusive background check services with a focus on protection to provide you with the most reliable and up-to-date details.

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Number of characters

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Check for Consistency

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