VentureBeat

BeenVerified is looking to shake up the background-checking industry with cheap and fast solutions that small businesses can afford.

The New York-based company is launching a service today that can perform an automated background check on job applicants for as little as $10 and turn the results around within a day.

While big companies can afford the services of professional investigation firms such as Kroll Associates, small businesses cannot. As a result, many don’t even conduct background checks. Those checks could reveal if your nanny has a criminal record or if your job candidate is a convicted felon using an assumed identity.

“We made it so that a small business can run these checks one at a time, as they need them,” said Joshua Levy, co-founder and chief executive of the company.

The service conducts the test with the candidate’s permission. Using a full name and email address, the service can check a varying range of records, including criminal courts records, educational degrees, license information and employment history. The service will go to primary sources, such as the Harvard Business School, to verify data such as college degrees. One piece of data costs $10 to check. But running a criminal background check on an executive can run as much as $90.

At the same time, the job candidate receives a copy of the report so he or she can know exactly what information has been dug up. That way, the candidate can immediately act to fix bad records. The candidate can take that background check and use it as an advantage over other candidates.

With the email address, the service can tell the employers whether the candidate has a MySpace or Facebook page. It’s up to the potential employers to decide whether those pages are worth scrutiny, Levy said. The company does not go so far as to check credit worthiness for a credit-card transaction.

The company was founded a year ago by Levy and Ross Cohen, head of marketing. Cohen said that the two men had been doing web site development for more than 12 years and had been struck at how many horror stories they had about freelance web designers who misrepresented their backgrounds or what they could do.

They started a beta test of the Employer service in August and have more than 200 corporate users. Thousands have signed up to use the JobSeeker service. Levy said the feedback from testers led to changes, such as the ability to share your background data with another person at the same company.

Rivals include companies that do this work themselves or investigation firms such as Kroll and data services such as ChoicePoint. Among the start-ups, Trufina verifies someone’s identity, while BeenVerified combines both employment and identity checks. Kroll says it charges $30 to $40 for small businesses per background check.

The company has seven employees. It raised a $200,000 angel round last year and then raised $600,000 in a first round from a hedge fund. Levy said the company may seek new funding in four to six months.

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Tags: co:beenverified, co:choicepoint, co:kroll-associates