FAQs About Hiring PI's On And Off The Internet

What You Should Know

This section is designed to help you find and hire the right investigator, and to make you aware of some of the warning signs to look for before you spend a lot of money with no result. It is also meant to quickly familiarize you with an industry that is full of the good, the bad, and the ugly.
Just as in buying a car, you need to remember: caveat emptor (Let the buyer beware). It is harder to get a driver's license then a PI license in most Provinces and States.

• Getting Into The Business (A Case Study)
• UPIs (Unlicensed Private Investigators)
• Ex-Police Officers as Private Investigators
• The Forensic Accounting Explosion
• Private PI Schools vs. College Courses - What You Should Know

A Case Study

If you were to pick up an old copy of the Yellow Pages (let's say three years old), go to the "investigators" section and start calling numbers, you would find very quickly that the majority of the agencies have gone out of business. And you would find a few who have been up and running for 10 to 15 years or more. There are common reasons why these agencies continue to stay in business.

Meanwhile, everyone is trying to get into the private investigating (PI) business, and so the industry is completely polluted. You have retired or ex-police officers, ex-prison guards, security professionals, ex-law enforcement officials, ex-police officers from other countries, consultants, bouncers, bikers, accountants, brokers, etc.

Many will simply start up an agency with no prior industry knowledge or private sector experience. Anyone who just comes into the industry cold like this, having never worked for an agency before, will last, at most, three years. This is a statistical fact, and is one of the main reasons why the law is so strong on requiring liability insurance for investigators.

Anyone planning on getting into this business with no industry experience will be well advised to have a bankruptcy trustee on standby.

Define Your Problem & Call Your Lawyer

The first thing you must do when you feel you need an investigator, is to accurately define your problem. If the problem is legal in nature, (i.e. any matter that is going to end up in court), the first place you should be running to is your lawyer and not the Yellow Pages or the Internet. As a legal problem your matter will probably fall within one of the following categories:

• Corporate Commercial
• Criminal
• Domestic
• Estate
• Financial & Collection
• Insurance

Our advice would be to find a lawyer who specializes in your area of concern. Let that lawyer refer you to a reputable PI agency. It is doubtful a lawyer is going to charge you for the referral if it's done over the telephone.

Don't Play Lawyer

Hiring a PI and undertaking an investigation may be completely pointless if you haven't consulted a lawyer first. You will find hundreds (if not thousands) of investigators willing to take your money and undertake an investigation for you. You may be told by the PI that you're headed in the right direction; while in a legal sense you may be going backwards and in fact hurting your case. Each legal matter (civil and criminal) has specific elements that have to be proven. Let your lawyer advise you first, and define what elements have to be proven in order to bring (and win) your case in court.

The information and evidence you may think is completely relevant may in fact be a waste of time and money. Only a lawyer should play lawyer. You may only get one chance at resolving your case, so follow the law and don't get caught up in the PI hype.

The Safest Way To Hire

Most PIs who are dealing with individuals for the first time will usually want a deposit (better known as a retainer) prior to starting the investigation.

By "individual," in this situation, we mean someone who is not a lawyer or other agent of a bank, insurance company, or major corporation.

The safest way to hire the PI is through your lawyer, who holds the investigator's fee in trust until the investigation is completed. This system protects both you and the investigator.

Your lawyer need only write a letter to the agency giving the instructions for the assignment. In this same letter the lawyer will confirm that a budget (for a certain amount) is held in trust and will be paid to the investigator upon receiving a report and invoice.

It is always best for you contact the PI agency over the telephone to confirm how much of a budget will be required to complete your investigation. Investigators can work on flat fee or an hourly rate; it really depends on the investigation.

With this procedure, your investigation is being monitored by a lawyer looking out for your interests. Your funds are protected in case you are unhappy with the way the PI handled your investigation. The only problem with this situation is that it can be costly to pay both legal and investigative fees. In our view, however, it is the safest way to hire a PI, if your investigation is going to be somewhat in-depth.

UPIs (Unlicensed Private Investigators)

Licensed, Bonded & Insured

Regardless of where you live in North America, generally the law will state that if you are going to conduct investigations (i.e. present yourself or your company as an investigator) in the private sector (as an individual or an agency), you must be licensed, bonded, and insured.

In almost all cases this will involve posting a bond and having a million dollars of liability insurance. With licensing comes laws and regulations setting out what an investigator can and can not do. The legislation is set out to regulate the industry and protect the consumer. The reality is that virtually anyone can get a license, providing they meet the minimum criteria. There are usually standards on how much experience you must have before an agency license is granted.

In some places it is a criminal Offence to hire an unlicensed Private Investigator. In many places it's also an Offence to knowingly hire an unlicensed PI through any sort of Legal Aid plan.

If an unlicensed investigator ends up acting as a witness for you in court, he or she will hold no credibility taking the stand when unlicensed. The rules of obtaining evidence are the same throughout North America: if (information) is obtained unlawfully, it's inadmissible.

Ex-Police Officers (as Private Investigators)

A great percentage of Private Investigators are ex-police officers, or retired law enforcement personnel. We've seen it all: "Staffed by Ex-CIA, Ex-FBI, Ex-RCMP..." This is big hype in the industry because to the uneducated consumer, this type of advertising sells big-time.

For the record, we wish to make it perfectly clear that there are many ex-police (or retired) police officers in this industry who are well respected, and who run very successful agencies. We are not for one second stereotyping anyone.

There are few things a consumer should be aware of as warning signs, however, when it comes to hiring a PI.

Private Sector vs. Public Sector

If it is your intention to hire an ex-police officer you must keep in mind that investigating in the private sector is entirely different when you no longer have the power of a badge or government authority behind you.

Investigation in the private sector is very difficult. No one is under any obligation to answer questions, or to assist you in an investigation. It takes years to develop investigative contacts in business, government, civil courts, banking, insurance, and other sources. You have to be somewhat more creative in obtaining information without a badge or public law enforcement authority.

If it becomes your intention to hire an ex-police officer, it is important to make sure that he/she hasn't just left the force and jumped into this business, as this happens every single day.

The individual must have worked in the private sector for a number of years. They must have had sufficient time to develop the contacts necessary to learn how to achieve results.

In our view, anything less than five years in the private sector means a big risk for you! If they don't have any prior agency experience (i.e. working for an investigative agency) it's a massive risk.

It is expected that any ex-police officer will have investigative skills and know how to investigate. But it's the number of contacts in the business which will determine if a result will be obtained. In this situation we are not talking about police contacts; we mean things like banking, insurance, utilities, telephone, civil courts, etc. And it is important to ask, why did they leave the force in the first place?

If your problem is civil in nature, it may not make sense to hire someone who has developed a career in law enforcement. Criminal and Civil matters are two separate issues.

How Things Can Go Wrong

Last year we were retained by a law firm here in Canada to assist and oversee effecting service of a Statement of Claim (or Notice of Complaint as you call it in the U.S.) . The objective was to serve an evasive defendant who lived in Las Vegas, Nevada.

The lawyer insisted that we use a certain investigator in Nevada who had a nice ad in the Las Vegas Yellow Pages reading "TEN YEARS CIA" and "Staffed Exclusively By Law Enforcement Personnel." Despite our advice we were instructed to go ahead with this firm.

In this situation the evasive defendant lived in an exclusive 18-floor condo which had a security gate guarded 24 hours a day. The sign out front read "No trespassing, trespassers will be prosecuted."

After five weeks and endless phone calls by us, we got a ten-page report back from the investigator. He had tried for weeks on end trying to get onto the property without being compromised by security.

Two pages of the investigator's report were devoted to his concerns over being charged with trespass. In the end we had no result, and a bill for $600.00 for his useless attempts. He charged this much because of his CIA experience. He said that was "what he was worth."

We then contacted our client and asked if they would let us use someone who we knew and had dealt with in the past. Our contact was not ex-anything, but had been in the business for fifteen years--seven of which were spent working for an agency, and the balance on his own license.

In 48 hours, service was effected personally. The end result: a two-page report, a commissioned affidavit of service, and a bill for $50.00. Everyone (except the defendant) lived happily ever after.

We knew the investigator we retained had a huge client list in Las Vegas and was well known in the private sector. In this situation, the investigator knew the property manager, as he did work in the past for the building's insurers. He got full consent of the property manager to come on to the property lawfully.

The property manager allowed him to wait in the parking lot and nothing else.

Service was effected right in the parking lot. How did the investigator know when the defendant was leaving? He made a telephone call to the defendant's wife (under a lawful pretext). He found out exactly when he was leaving for work and served him in the morning.

Make no mistake, this situation was the easiest of tasks. The market value to effect service of a legal document in Canada and the United States is no more than $100.00.

There are creditable investigators in Nevada working and billing only when they effect service or locate the individual. If they don't succeed, they will bill you nothing.

If your problem is civil in nature, it may not make sense to hire and pay huge fees for someone with a decade of police experience. If you need a good criminal defense investigation or someone who has good contacts in law enforcement, then hiring an ex-police officer is the way to go.

The main point here is, don't get caught up in huge police stories for simple tasks. The people you're considering hiring must have the industry experience, and have the private sector sources, accompanied by references of creditable companies who have retained them as a private agency. They must have an idea of what the going hourly rates (or flat rates) are for common investigative tasks.

Hire From Within (The Power of Referral)

Always hire from within. The investigator you hire (regardless of background) should be referred by your lawyer or your insurance claims department. This is an industry built on referral. There are thousands of investigative agencies who don't advertise. Ask the following questions:

1. How many years on the force ?
2. What did you do on the force and why did you leave ?
3. Are you licensed, bonded, and insured ?
4. How many years have you been working in the private sector? (no less than five years, or it's a risk )
5. Have your ever worked as an employee for an investigative agency ?
6. Can you provide references and a curriculum vitae of creditable companies (or individuals) that have hired you ?

The Forensic Accounting Explosion

Growing at an even faster pace than the investigation field, is that of forensic accounting. Years ago you could pick up a legal directory or insurance adjusters directory and you would see only a few of these firms out there. Today the industry is on the verge of saturation.

The purpose of this segment is to explain the primary difference between PIs and Forensic Accountants. As a consumer you will no doubt find that PIs and Forensic Accountants advertise in the same areas. You may find yourself confused.

Most Forensic Accountants are (at the very minimum) chartered accountants. What usually gives them the right to use the term "Forensic Accountant" is primarily the completion of a Certified Fraud Examiners Course better known as a "CFE" designation.

This designation works on a point system based on your educational background and your fraud-related investigation experience. You are expected to maintain points each year by regularly attending seminars and lectures that gain you points. If you don't have the experience you will be compelled to write the exam.

The course itself is most commonly done through correspondence. Very often it is possible for a CFE candidate to be "grandfathered in," so that if the candidate has enough background (i.e. points), he or she can obtain the CFE designation without having to write any formal exam.

Under normal circumstances, forensic accounting firms are primarily used to analyze existing data or information that has been presented to them by a client. They will take the information and conduct an investigation. Some examples are wage loss, fire loss, retail fraud, embezzlement, fraudulent conveyance of assets, and so on. The objective is to analyze the data and present it to a client, and most importantly, to a court.

Here we come to the real difference between the two fields (though forensic accounting has been given a far better reputation than Private Investigators):

Private Investigators are involved in obtaining, finding and retrieving data. Forensic Accountants (under most circumstances) are involved in taking existing data and analyzing it as described above.

A forensic accounting firm may not have the facilities or contacts to find and seek out this information. If you ever have the opportunity to read a forensic accounting report, you will read the same phrase over and over: "based on the data presented before us, we found this..."

The term "investigations" and "investigations department" in this area can mean "to get" (as an investigator) or "to analyze" (as a forensic accountant). This all comes back to "defining your problem."

As usual we must state that this is only to give you a general idea of the field. The practices of each firm will differ from firm to firm.

Private PI Schools vs. College Courses - What You Should Know

Conclusion

We would like to hear from you. Was this information helpful to you? Did we tell you something you didn't already know? If you work in the industry, what did you think? Are we correct or have you been insulted? Do you have any ideas or comments you would like to see here? We might post your comment if we feel it's a valid point. Is there anything missing? Let us know!