Independent CFEs Need to Check Their Jurisdictions on PI Licensure Laws

January/February 2012

By James S. Peet, Ph.D., CFE

ACFE News

Last summer, the General Forum in the Members Only discussion forums on ACFE.com contained a long conversational stream on whether CFEs need private investigator licenses to conduct fraud examinations. The consensus among the discussants was a clear "maybe." This unequivocal consensus was based on the private investigator licensing laws and regulations applicable in the relevant jurisdictions.

Most licensing laws define the activities that constitute private investigative work and state that only licensed persons can engage in those activities. In the U.S., for example, private investigator licensing is controlled by each state, and 42 states and the District of Columbia have licensing requirements for private investigators. (Alabama, Alaska, Colorado, Idaho, Mississippi, South Dakota and Wyoming do not have statewide licensing requirements.)

Basically, in most jurisdictions, the question as to whether an individual must be licensed as a private investigator depends on whether the individual engages in private investigative work. And perhaps the most relevant factors in determining this are how the relevant jurisdictions define "private investigative work" (or some variation of this term, such as private detective business or private investigation service) and if the individual is an employee of an entity or is independent. (Check out the thread "PI Licensure" in the General Forum.)

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