I just turned down being interviewed for a contract position due to the client's demands for an invasive examination of my life which even exceeded what I had to do for a Secret security clearance.
Here's what they wanted me to fill out before a phone screen was even done:
The usual employment stuff
Detailed job history
Authorization for investigative consumer report (salaries, lifestyle, friends, etc)
Authorization for credit check
Authorization for drug testing
Authorization for fingerprint and criminal background check
Every form had my address/social security number/birth date on it and would likely be faxed to some subcontractor. There were no assurances of protecting my privacy on any form. Faxing these forms to the recruiter would open me to all sorts of identity theft since I have no way to measure the honesty of everyone in the chain (or even know who they might be).
I can understand an employer/contractee's need to verify that I am not a crook or likely to steal something after making a tentative agreement to hire me, and then where I have at least some idea of who is in charge of the information (like an HR department).
In the early 80's I qualified for a Secret Security Clearance from the DOD, and it actually had less requirements than this simple contract (which is not a defense company, just a financial services company like ones I have worked for in the past). In that defense job I was hired and then began the clearance process (although I had the clearance I never actually needed it). The FBI did all the work; whatever you might think of the government, at least they already had all the info I gave them.
So I've said no to this one, unless they decide to change their tune (sometimes people make demands they are willing to negotiate on), I will continue to work with other contract options that are less invasive.
I have nothing to hide that would concern anyone, but defending your privacy and personal information is all about avoiding giving others the opportunity to rip you off. You have to balance giving out enough to satisfy a reasonable request to the risk of losing your identity.
I'm not willing to risk all for a chance at a job.