Supposedly risk should be probability times cost. But I think that people have a remarkably difficult time processing a risk that's based on a very high cost and very low probability. (The limiting case of an infinite cost and infinitesimal probability is how I describe Pascal's Wager).

In those circumstances, it's easy to imagine the mental math: Firing someone could cost many times their salary, but a screening service costs 50 bucks per candidate. So the chance of weeding out one bad candidate pays for the service, right? Where's the fallacy?

I think the fallacy is that the service doesn't actually improve the hiring process, and the ROI is zero.