Why is it so dangerous to embellish information on your resume?

Because if you get caught, “It calls into question everything about you,” says Richard Lipstein, a Boyden Global Executive Search managing director.

This is now something Yahoo CEO Scott Thompson knows only too well.

After a shareholder discovered that Thompson doesn't hold the computer science degree that's been listed in his numerous biographies and securities filings, he may need to step down.

Some experts suggest it’s rare to get caught in a lie on your resume: MSNBC quotes the Society for Human Resource Management saying that just under half of companies check to see if job applicants have the degrees they claim to hold and that an even smaller percentage verifies that job seekers actually went to the schools they say they attended.

That is definitely not the case when you’re being vetted by a recruiter, however.

Lipstein tells eFinancialCareers that between a quarter and a third of hires in the U.S. are made through recruiters, and he stresses that it’s part of any recruiter’s due diligence to confirm a job candidate’s education and employment and to check references given. Companies that employ third-party recruiters know that someone has their back and to “look at the nitty-gritty.”

A Job Offer May Be Rescinded

Lipstein says that in his 20-some years in the business, he can recall occasions where offers have been taken away from job candidates due to “puffery” on their part with regard to items including prior compensation, education and failing to disclose criminal background information recorded by FINRA’s Central Registration Depository (CRD) system.

Moreover, he says, today it’s easier than ever to learn whether job candidates have lied about their professional backgrounds.

“In this era of Internet transparency, it's easier to find out about people and their career paths,” says the recruiter. This includes things they’ve left out of their resumes, as well as information that’s been embellished or fictitiously created.

Like many experts, Lipstein says it’s usually best to include all of one’s job history on a resume, even the short stints, since “everyone’s entitled to a mistake,” and since it’s easy to go online and find information that may call the veracity of one’s resume into question.

“The rule of thumb is never, ever mislead on a resume, and rarely should you leave out a position,” says the recruiter.

John Challenger of executive outplacement firm Challenger, Gray & Christmas concurs with Lipstein, telling MSNBC that while resume inflation is common, “Sometimes people enhance their resume or add a credential, and then they can't ever get away from it."

The situation at Yahoo has also altered the career path of Patti Hart, the company’s search committee chair.

Hedge fund Third Point LLC, a Yahoo investor which discovered what it termed the "material inaccuracies" in Thompson's credentials, sent a letter to Yahoo last week calling for the ouster of Thompson along with Hart.

So far, Yahoo is standing by Thompson, but Hart is expected to surrender her board seat at the company's still-unscheduled annual meeting, the Associated Press reported yesterday.