Too many times I have heard stories about applicants being denied jobs because of their background investigations. These are people who are told they have criminal records when they have never been arrested. Most of this time this happens because of data vendors who do not hand view their results and check to make sure that the records in the database actually pertain to the applicant they are screening. This usually happens with applicants with common names. What occurs is that an applicant may have the same name or date of birth as someone who has a criminal history. The software automatically assumes that the arrest data pertains to the applicant and includes it in the report to the employer.
Although not all methods are perfect, database background screening companies that utilize software programs to run their searches through outdated, publicly available sources are at the highest risk of error. Individuals with common names are also at a much higher risk.
The video link below from CNN is an example of how someone with a common name was denied a job because a criminal record belonging to someone else was in his background investigation. I can tell you that an experienced investigator would have caught the discrepancy and double checked the findings.
Hopefully more employers will see the consequences of using instant background searches conducted by computer software.
http://www.cnn.com/video/?/video/business/2009/09/29/willis.privacy.data.cnn