Background checks of any type can be used for both personal and professional reasons. There are as many different reasons out there to run them as to not. When you are doing these, there are different legal issues with which you have to deal. In some cases, you are going to have to study the laws in your state before you attempt anything. In other cases, you are on your own when deciding what you should and should not do.
You have to be very careful when running background checks on potential employees. There are many laws in place that state the reasons why you should ask someone before you run any type of check. These can range from credit or criminal background, to things like academic or even medical records. For the most part, any company needs to get, in writing, permission from the applicant to get this information.
The problem with background checks is that things can come up that lead to a bias towards someone, but do not constitute legal reasons to disqualify a job candidate. Though this happens all of the time, it is not legal. Companies that have a Human Resources department are usually in the clear. As they already know the laws and regulations with background checks. That means they know what they can and can not do.
If you have a small business, however, and you have no idea what you are doing. You should find out your local and state laws before you dive into any background checks. This covers you if you decide not to hire someone and they get angry and try to retaliate. When you know you have a legal right, still do yourself a favor and have permission, in writing, from the applicant. Be careful when you use free online resources like Facebook and MySpace. As these are being called into question (in regards to privacy issues) as well.
When it comes to personal relationships, on the other hand, you may not need any legal permission to run them. The person may never know you are doing it, and if you can find the information for free. There is no reason why you have to maintain a friendship or a relationship with someone who has a past that you can not come to grips with in any way. Try sites that give you an option for a free background check to see what you can find.