In today’s high-risk environment, background verification checks are not optional, but essential. Whether you’re hiring, onboarding suppliers, or entering new partnerships, skipping due diligence is a costly gamble. In 2023 alone, fraud drained $485.6 billion (R8.7 trillion) from the global economy, comparable to the GDP of a mid-sized country. If fraud were a country, it would rank between 30th and 35th in the world, just below Austria and ahead of Nigeria.
But fraud is only the tip of the iceberg. Regulatory breaches, reputational risks, and financial losses often follow when proper checks are ignored.
We have seen the damage firsthand, which is why we advocate a proactive and structured approach to business verifications; one that protects your business, empowers your people, and builds lasting trust.
Why it matters
Verification and screening are about understanding who you’re dealing with, identifying potential risks early, and making informed decisions that safeguard your operations.
Correct Background verification checks go a long way to help your business:
- Prevent fraud, corruption, and misconduct: Whether it’s a job applicant with a falsified CV or a vendor with a history of corruption, proper pre-employment and supplier checks help you spot red flags and risks before they become unavoidable liabilities.
- Protect your reputation and brand: In the age of social media and instant news, reputational damage spreads fast. Partnering or associating with the wrong individual or organisation can erode stakeholder trust and damage your brand.
- Maintain regulatory compliance: From data and personal information protection and privacy laws, such as POPIA, to anti-money laundering (AML) and counter-terrorism financing laws, including FICA, POCA, and the Protection of Constitutional Democracy Against Terrorist and Related Activities Act, businesses in South Africa face increasing regulatory scrutiny. Comprehensive compliance checks help ensure you meet your legal obligations.
- Reduce financial risk: Fraudulent suppliers, unqualified employees, or shell companies can drain your resources and damage your reputation. Rigorous business vetting helps you avoid costly mistakes, strengthen compliance, and make smarter financial decisions.
- Create a culture of accountability: When verification becomes part of your business DNA, it sends a clear message: integrity matters at all costs.
What should be verified?
The need for background verification checks varies by industry, size, and risk exposure, but some areas demand consistent attention.
Here’s where smart businesses focus:
- Employee background checks
A bad hire can trigger financial, legal, and reputational risks. Always verify:
- Identity and criminal record
- Employment history and references
- Qualifications and credentials
- Credit checks (where relevant)
This is critical for roles involving finance, data access, or decision-making authority. Employee screening ensures your workforce is both trustworthy and compliant.
- Vendor and supplier screening
Your suppliers reflect your brand. Before entering into any agreement, verify:
- Company registration and ownership
- Financial stability
- Tax compliance
- Blacklisting or legal disputes
- Conflict of interest with internal staff
Third-party due diligence protects your reputation and ensures ethical partnerships.
- Customer due diligence (CDD)
For high-value or regulated transactions, screen for:
- Identity and address verification
- Sanctions and watchlist matches
- Source of funds
- Risk of money laundering or fraud
Customer due diligence checks are central to AML compliance and business integrity.
- Director and shareholder checks
Before entering partnerships, know who is really behind the business. Look for:
- Undisclosed interests
- Past business failures
- Disqualifications or criminal records
- Links to politically exposed persons (PEPs)
Director verification provides insight that supports informed, strategic decision-making.
Avoid these common mistakes
Despite the importance of background verification checks, many businesses still fall into common traps:
- Relying on outdated or incomplete data: Doing a quick Google search won’t cut it; you need access to current and verified data.
- Applying a one-size-fits-all approach: Not all roles or relationships carry the same risk. Your verification and screening process should be tailored to the level of exposure.
- Failing to re-screen over time: People and businesses evolve. Regular re-verification ensures your risk assessments remain accurate and current.
- Ignoring red flags: If something doesn’t add up, dig deeper. Investigate further, and if you are still empty-handed, seek expert advice.
How Loxton Forensics can assist
At Loxton Forensics, we specialise in helping businesses build robust background verification frameworks that are practical, compliant, and effective. Our services include:
- Employee and executive background checks: We verify qualifications, employment history, criminal records, and more — discreetly and thoroughly.
- Vendor and third-party due diligence: We assess the financial, legal, and reputational risks of your suppliers and partners through comprehensive verification checks.
- Forensic investigations: If you suspect fraud or misconduct, we uncover the truth and provide evidence that holds up in court.
- Policy and process reviews: We refine your verification policies to align with industry best practices and legal requirements.
Our approach is human-centric, confidential, and tailored to your business needs. We don’t just deliver data; we also deliver insight.</
Five steps to strengthen verification and screening in your business
A strong background verification process protects your business from fraud, reputational harm, and regulatory breaches:
- Define your risk areas: Identify and prioritise high-risk roles, relationships, or transactions.
- Develop clear policies: Create written policies that outline what checks are required, when, and by whom.
- Use reliable data sources: Partner with trusted providers who offer up-to-date, verified information.
- Train your team: Equip HR, procurement, and compliance teams with the knowledge to conduct effective background verification checks.
- Review regularly: Schedule periodic reviews to update screening processes, ensuring they align with evolving risks and regulations.
Final thoughts: Trust, but verify
In business, trust is essential, but blind trust is dangerous. Verification and screening build trust on a foundation of facts, not assumptions.
At Loxton Forensics, we believe that good decisions start with good information. Whether you’re hiring, partnering, or investing, we help you verify with confidence.
Need support?
Contact our team today for expert advice and tailored background verification solutions that protect your business and reputation.