During the decade Mo Zahabi spent working at car dealerships, he was continually shocked by the lack of due diligence in hiring.
"At the last dealership group I worked for, there was somebody who'd been there for 12 years when we found out he'd been in prison at one point," says Zahabi, director of product consulting for VinSolutions, a customer relations management software developer in Mission, Kan. "He was one of the best salespeople I'd worked with, so he really was reformed, but it blows my mind so few dealers do background checks."
Conducting criminal background checks on potential hires is a best practice, yet many dealers skip them, and that's a problem, insurance experts and consultants say. The biggest payouts insurers make to dealers are for losses from misappropriation of cash, parts shortages, and finance and insurance scams, all of which could be mitigated by hiring people with proven clean records, the experts say. The less the risk of fraud at a dealership, the less the dealer pays for insurance. So if it's permissible to run a criminal background check, do it, they say.
"You do not want people on the payroll who have a propensity to have criminal behavior at work," says Adam Robinson, CEO of consultancy Hireology in Chicago. "Criminal background checks are not a place where you want to save $20."
Indeed, in a 2016 report on occupational fraud — defined as fraud committed by a person against the organization for which he or she works — the Association of Certified Fraud Examiners said the median loss for all cases compiled was $150,000, with 23 percent of cases causing losses of $1 million or more.
That's one reason dealer Aaron Zeigler, president of Zeigler Auto Group in Kalamazoo, Mich., spares no expense when it comes to doing criminal background checks and drug tests on all hires at the group's 23 stores. He started the policy in 2010.
"If anybody's had a felony on the record, I'm the only one who can override it to hire them," Zeigler said. "It's amazing the stuff the background checks come up with."
In fact, on just the second criminal background check Zeigler's group performed, it found the applicant's resume was full of lies. "He'd actually been in prison for the past 17 years for murder," Zeigler said.
For Zeigler to hire a person with a felony conviction, he said, the crime would have to be 15 to 20 years old and the person would have to show he or she is reformed. He said it's "pretty rare" for him to hire someone with a criminal record, especially in the F&I department, where money is handled.