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How necessary are DBS Checks in the financial sector?

If you work for or are planning to work for a financial service, it is likely that you will require a DBS Check. But which roles specifically require this check and which checks would they require?

We’ve put together this guide on DBS Checks in the financial sector to try and answer all these questions and more.

 

DBS Checks in the financial sector: Which roles qualify for a check?

The Financial Conduct Authority (FCA) considers employees eligible for a Standard DBS Check if their role requires them to perform a controlled function.

Examples of a controlled function would include:

  • Acting as a director, partner or chief executive of a regulated firm
  • Responsibility for said firm’s systems and controls
  • Overseeing compliance to the FCA’s rules and regulations

A company can be regulated by the FCA but not the employees. In these scenarios, the organisation cannot request Standard DBS checks on their staff. 

Chartered accountants and certified accountants also require a Standard DBS Check before they enter into the profession.

When applying for DBS Checks in the financial sector, some organisations may require an adverse credit check or an identity check.

 

What is an adverse credit check?

The phrase ‘adverse credit’ refers to any late or non-payment on an individual’s credit history. 

An adverse credit check will display any ‘serious’ adverse credit history in the form of:

  • Individual Voluntary Arrangement (IVA) – a formal agreement between you and your creditors that helps you repay what you can afford towards your debts
  • County Court Judgement (CCJ) – an order from a County Court to pay a debt
  • Bankruptcy – a legal proceeding involving a person (or business) that is unable to repay outstanding debts

Credit checks on potential employees are legally required by certain organisations. However, Adverse Credit Checks are available to all employers.

It’s an invaluable part of the screening process and enables the employer to make a more informed recruitment decision; particularly if employees have access to cash, accounts or valuables – as they are likely to in the financial sector.

It is important to note that an Adverse Credit Check is not the same report that can be obtained by lenders, such as banks. It will not check an individual’s credit score.

 

What is an identity check?

An identity check cross references a prospective employees information with data held on secure databases in order to confirm their true identity. 

An identity check will work to do this by confirming the information matches data held by three sets of data, including: 

  • Information held by credit referencing agencies
  • Electoral roll
  • Telephone database

But why would someone lie about their identity when applying for a job? The Centre for the Protection of National Infrastructure (CPNI) has outlined the four main reasons why a prospective employee may lie about their identity: 

  • To avoid detection
  • For dishonest financial gain
  • To avoid financial liabilities
  • To legally obtain genuine documents

This kind of check is can be useful for most employers – making sure that an applicant is being honest about their identity can help to validate their authenticity, as well as the authenticity of any further checks (DBS or otherwise) that have been performed on them.

 

DBS Checks in the financial sector: Conclusion

When considering applying for work in the financial sector, it is important to consider what roles or responsibilities a potential employee might have. If they are liable to perform a ‘controlled function’ then they will definitely be eligible for a Standard DBS Check. Otherwise, the nature of the industry may require an employee to undergo an adverse credit or identity check.

If you have any more questions about DBS Checks in the financial sector, please don’t hesitate to get in touch – we’re always happy to help.

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Our blogs are advisory in nature and reflect M G Care Executive Limited trading as uCheck’s current thinking about best and common practice in the subjects discussed.

The information contained in our blogs have been provided for information purposes only. This information does not constitute legal, professional, or commercial advice. Whilst every care has been taken to ensure that the content is up to date, useful and accurate, M G Care Executive Limited trading as uCheck gives no guarantees, undertakings, or warranties in this regard, or, for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information.

 

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