There in lies part of the problem. It is not as simple as you make it sound. While I 100% agree with you that honesty upfront is the absolute best approach, the problem is that 9 out of 10 times employers simply scan applications, see a check for conviction/arrest history, with or without notes explaining the circumstances, and discard the application. So while the applicant may have taken the best approach, it often doesn't work out for them.
The real problem with background checks is that there is loose regulation around them. Often times these companies return inaccurate or incomplete results. Often times they provide reports that are not in compliance with FCRA. An even bigger problem is that a background report provides absolutely no context to a crime. They also make it difficult at best to dispute any mistakes. This is a huge problem.
GoodHire (a Checkr competitor) are working to change this somewhat. They allow individuals to add notes and context to their own background reports. This can be done individually (the person pays for their own report and adds the notes) or after a background check is provided by a company.
It is not necessarily about paying to "clear allegations" against them, it is about adding context to convictions/arrests listed their background report.
For example, someone may add this to a drug conviction listed on their report: "I was 18, a freshman in college, and away from home for the first time. I was at a party where drugs were consumed and I was subsequently arrested for possession. Since that time I have obtained my college degree and maintained an active, drug free, lifestyle. I learned my lesson, changed my life and drugs are no longer a part of my lifestyle."
If the receive a copy of their report due to an adverse action by an employer there is no charge to add the statement. I do agree, however, that, like a credit report, background reports should be free to obtain at least once a year. There are countless cases of mistaken identity and incorrect information on criminal background reports that are often found out after it is too late. Often times too, many arrests/convictions can be removed from your report depending on the type, state, and age of arrest/conviction. Many college students don't realize the long-term repercussions of simple indiscretions. It is only after they apply for a job and are turned down because of a background check that they realize the beer they were caught drinking at age 20 in their college dorm room had bigger consequences than the $50 fine.
The real problem with background checks is that there is loose regulation around them. Often times these companies return inaccurate or incomplete results. Often times they provide reports that are not in compliance with FCRA. An even bigger problem is that a background report provides absolutely no context to a crime. They also make it difficult at best to dispute any mistakes. This is a huge problem.
GoodHire (a Checkr competitor) are working to change this somewhat. They allow individuals to add notes and context to their own background reports. This can be done individually (the person pays for their own report and adds the notes) or after a background check is provided by a company.
Disclaimer: My company is a GoodHire partner.