Thanks for all the replies.
On the West Coast, USA, the cultural norm that I have observed is that most JWs check out other JWs on their own without officially asking the BOE for their opinion as long as the person they're interested in is fairly local. They can get quite a bit of info (skewed as it may be) from the local JW gossip mill. When a JW is interested in someone out of the area though, it's more common to give the long-distant BOE a call.
I never invoked this "arrangement" since I always got to know people locally.
When I first started this thread, I was about 99% against it. Now I'm about 85% against it. For the most part, it just gives elders the opportunity to exert needless control and influence over the lives of others as Gregor's story well illustrates.
Blondie's story though, shows how the option of checking with the elders COULD have been a good thing. The elder clearly blew it, but there was a chance that he could have protected the sister. Since the guy was a convincted pedophile, the elder could have easily told her that she should check out his criminal record and that he STRONGLY recommends that she stay away because of what she would find there. To the extent that the "arrangement" of checking with the elders helps curb predators (sexual, financial, emotional) it actually could do some good in a minority of cases.
For the most part though, I think it's a screwy arrangement.