A booming business in background investigations

While studying business marketing at Iowa State University, Christopher Ballas and a few tech-savvy friends launched a startup that sold public database information to private investigators and skip tracers seeking fugitives.

Today, some 22 years later, Sacramento-based Backgrounds Online has 25 employees and a far more sophisticated business model that focuses primarily on employment screening services for nearly 20 industries, including construction, real estate, government and health care. Moreover, the company has grown 25 percent each year for the past two years.

Ballas, the company’s CEO, has been at the helm of this rapidly growing company the entire time, although he did take a seven-year detour along the way.  

When Ballas, 42, co-founded Backgrounds Online, it wasn’t glamorous work: He spent much of his time cold-calling investigators and skip tracers to drum up business. It was slow going at first. While he kept Backgrounds Online going as a company, Ballas joined PeopleFinders in Sacramento as vice president of customer care and operations in 2003. He spent seven years with PeopleFinders, which searches for lost family and friends for the public, before returning to Backgrounds Online full time in 2010, by which time it was starting to flourish.

"I was basically doing both full time," Ballas said. "As the businesses grew, I had to step away to focus on this (Backgrounds Online) full time."

By then Backgrounds Online was doing mostly corporate security and pre-employment background checks. More recently the company began offering a subscription service for annual employee screenings, which Ballas said has helped drive the annual 25 percent growth over then past two years. The increase in work doesn’t necessarily correlate to an increase in employees, Ballas said, because the work is highly automated. He declined to disclose revenue.

Backgrounds Online digs up employee screening information by searching through motor vehicle databases, criminal and civil court records and other online resources.

These background checks raise privacy and public access issues that vary by jurisdiction, as well as federal, states and local rules. For instance, in some states, search information can go back to 10 years or more, where in California, searches are limited to seven years. "There is a lot of compliance, but we have simplified the service," Ballas said. “Our clients want to offer a safe environment to their employees and customers.”  

The company’s clients include senior living facilities and health care companies whose employees enter clients’ homes. Real estate firms are also major clients because of all the personal information and documentation employees handle during typical transactions. Transportation and delivery companies also use Backgrounds Online to make sure drivers have proper insurance and are in compliance with other industry standards.

“Increasingly, it is the public’s expectation that these people are being vetted,” Ballas said. “Consumers are seeking more on-demand items, everything from package to hot-food delivery,” and that means a driver delivering and potentially entering a home or business.

The company charges between $18 and $100 for employee searches and screenings, with an average of around $35, said Seth Atchue, business development officer with Backgrounds Online.

The company also does academic graduation and medical license verifications. Clients can choose a menu of search criteria and go as deep or shallow as they want, Ballas said. Some companies just want to verify a valid license, while others may want county, state and federal criminal searches, warrants, education verification and insurance verification.

Backgrounds Online is audited by the American Institute of Certified Public Accountants for data security and also certified for use for human resources searches and for compliance searches. It also is accredited by the National Association of Professional Background Screeners.

The searches are available to the employees whose backgrounds are searched so they can check and confirm the information, Atchue said.

“We don’t make decisions. We provide information,” Atchue said.

Jennifer Garcia, customer care manager for PeopleFinders, Ballas’ former employer, said Backgrounds Online performs a crucial service for many industries, as people whose employment demands a clean record may not share problems with the law with employers, hoping to fly under the radar with compliance for as long as possible.

For example, Garcia said truck drivers who get DUIs might not share that information immediately with employers. Or someone who applies to work at a school gets their fingerprints checked, but without updating searches, the school would have no idea if the person committed a crime and should have his or her access restricted.

“People who walked through your front door a decade ago and passed a background check, you might not know anything about them anymore. I can’t tell you how important it is what they are doing,” Garcia said.

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The Essentials  

Name: Christopher Ballas

Title: CEO

Age: 42

Education: B.S. in business marketing, Iowa State University

Career: Co-founded Backgrounds Online, a skip-tracing startup service using public records, in 1997 while in college. Worked as vice president of customer care and operations for PeopleFinders from 2003 to 2010. Returned to Backgrounds Online full time in 2010, where he remains CEO.

Personal/family: Single

Passions: Ballas started traveling to Europe to visit his brother who was in the military. Today he frequently travels to international destinations, including his most recent trip to Berlin. Ballas is also a big fan of Chicago sports teams, and tries to go to at least a dozen Cubs home games each year.

First job: He worked tending a driving range at a golf course, including driving the cage car. “I’m not a big golfer. Doing that job got me to work a lot harder at school.”