Consumer Tips

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The Reality of Brokers: Farming Out Investigations

Some businesses are in essence broker or referral companies; namely, companies that make much of their profit by “brokering” or “referring” your file at a reduced rate to someone outside the company. Referral companies may not even be licensed or qualified. They simply develop a visually pleasing website, take your calls, and assign cases to other investigators. Often these businesses mislead consumers into thinking they’ll be working your file — but in turn find someone willing to do your work at a 25-40% discount. The individual hired, someone unknown to you, may lack any professional investigative skills.

"National" Investigative Brokers Are Not Nationally Licensed

Most of these agencies claim to be “National” but are not. There is no national license and they would have to be licensed in all 50 states. Many aren’t licensed in all of the states they advertise or imply they can operate. Regulatory agencies have expressed concern with this misleading advertising and unlicensed activity. Consumers hiring unlicensed (or improperly) licensed investigators open themselves to possible civil suits involving negligence and vicarious liability.

Would You Trust Your Confidential Information to the Lowest Bidder?

Further, consumers should be aware that in these business models, confidential information is at risk as they may share the information with those that have no legal right to it. Short-term, and/or non-professional or qualified employees don’t feel compelled to keep confidential information confidential.

Clients Deserve to Know the Honest Facts

Referral companies generally request 25%-40% of the investigative fees billed by the “working” investigator be sent to them. A practice frowned upon by professional investigators. Consumers discovering this scheme have expressed more than disappointment over the practice, claiming the hired pi agency mislead them. Advertising investigations one doesn’t do, or have the skills to perform, is false advertisement.

Be sure you get experienced investigators

All investigative companies claim their employees or subcontractors are experienced professional investigators. Unfortunately this isn’t always the case. Request the individual working your file not be a novice investigator. An on-call individual who assists agencies with files when they’re not working their full-time job in an “unrelated” field.

Employee turnover is high in the investigative industry. Be wary of taking the chance a short-term employee can be located in the event he/she is needed to testify on your behalf in court. In short, if you’re paying the hourly rate of a “licensed” investigator; insist that a licensed investigator will be working your file. 

Be cautious of what you see on internet investigative websites. Don’t assume an agency’s website is entirely accurate or honest. Many contain misleading or inaccurate information.

Be Wary of Illegal and Unlicensed Investigators and Agencies

The importance of ensuring an entity is licensed in Minnesota state regulations can provide you the confidence that the entity has gained the necessary experience conducting investigations, has a clear criminal background, and maintains financial responsibility to handle liabilities. Maintains a bond with the state, adheres to state and federal laws, and is audited every two years to ensure compliance.

Numerous out-state companies advertise illegally in Minnesota and other states via the internet. The State of Minnesota doesn’t have the resources to stop or prosecute them all. In order to protect yourself it’s recommended you visit the states licensing agency’s website. Listed are those businesses and individuals licensed to “advertise” and provide investigative services in the State of Minnesota. In Minnesota you can find that website here: https://dps.mn.gov/entity/pdb/Pages/default.aspx

Ensure Your Confidential Information is Protected

Some companies exploit cases for their own promotional purposes (i.e., divulging details of your case on the internet, television, or sensationalizing it for publication). It’s wise to factor in a firm’s willingness to protect confidential client information and ensure this is clearly stated in any contracts signed by parties involved.