State and Local Requirements
Most states require a license specifically for conducting private investigations. However, as of this publication, the following states do not:
Alabama (PI license required by Birmingham and Mobile; business license required for all)
Alaska (PI license required by several cities; business license required for all)
Missouri (license required by several cities)
South Dakota (business license required through Department of Revenue)
Wyoming (regulated by local jurisdictions)
Although these states do not regulate private investigators like other states, they may require some type of license, usually a business license. The reasons these states don't regulate PIs differ, but the general argument for this absence of oversight is that regulation — and the fees accompanying it — may force the small investigator out of business or prevent would-be investigators from entering the field. State licensure is seen as an unnecessary and burdensome expense. Though no overall requirements for licensure in these states exist, individual cities may have PI license requirements, but in most cases, this practice amounts to little more than a means for generating revenue; typically, no regulations accompany the licenses.
The reason for putting regulations and licensing in place is to protect the public from unscrupulous and incompetent investigators. Regulations provide guidelines within which investigators must operate. Fingerprinting and background checks are common, further protecting the public by revealing an applicant's past and weeding out those with criminal histories. Without a license, it is anyone's guess whether the investigator's claims of education and experience are correct. Corruption often flourishes in the absence of operational guidelines.
In an attempt to counter this, most states have created Web sites where PI licenses can be verified. Some provide information concerning client complaints and disciplinary actions against PIs and agencies. In states where oversight exists, boards typically have the power to enforce attendance at training academies and continuing education classes as well. Boards can also discipline agencies or individual investigators for actions such as:
Invasion of privacy through trespass, eavesdropping, illegal surveillance, or other means
Assault and related offenses
Violation of search and seizure laws
Violation of laws concerning weapon use and concealed weapon carry laws
Violation of federal and state constitutional laws and principles
Violation of state ethics laws
Violation of additional state criminal laws and procedures pertaining to investigations
Another area that can be sanctioned by oversight agencies is that of padding fees, although it's difficult to prove. Most investigators are careful to steer clear of this violation, but there are always the few who take advantage when they see an opportunity.
Research your state's requirements before operating. Some states not only require a license, but class time and a passing exam grade that proves the investigator's knowledge of the field. The Web site
Operating within compliance also means compliance with state and local tax authorities. Contact an accountant or your state tax department. The Web site