The higher you rise in your career, and the better companies you work for, the more you'll find your references are checked. When I applied for a part-time Christmas season job at a Photos with Santa booth last year, no one checked my references. For my current salaried job, they checked every single one (I gave four).
I've been working as a full-time salaried (insert whatever term you like here for people who write code) for coming up on 13 years now.
This past month, going through the process with a potential new employer, was the first time anyone insisted on contact information for my previous jobs and made any effort to try to check on them. I have worked at both small (startup) and large (household-name) companies, at increasing levels of seniority. None of them ever did that.
When working menial jobs, that required little skill, and no prior experience, references were almost always asked for, and sometimes checked.
As a software dev, moving across multiple large companies (large defense contractor, international broadcast network, international multi-industrial, well known video streaming site), from dev, dev II, senior dev, lead, manager, I've never had anyone even ask for references (I've seen one or two application systems that requested them when I was job hunting; I just didn't apply to those jobs).
What is the downside to just always giving a positive review, though? To rephrase the original question - this is recruiter/company A calling a person who works at company B to see if someone is suitable for company A. If you just always give a nice review, what is the downside for you? Unless you had genuine personal issues with the candidate, why wouldn't you just always give a good review? If the person doesn't work out, what recourse does the recruiter / company A have against you?
Ignoring that you might altruistically want to help another company -- what's the downside to being honest? If you don't want to go into detail, you could just say "We would/wouldn't hire this individual again." You gain and lose nothing either way.
I don't think the recruiter seeking a positive or negative review, so much as simply verifying claims made by the candidate or their resume. Something like...
> Tell me a little about Jim's day-to-day
> Sure... Jim is an above average junior software dev...
> Sorry you say junior or senior dev? Does Jim have team management roles?
You can give a glowing review, but depending how how Jim portrayed himself, the review can be taken by the recruiter as a net neg/pos. To directly address your question - I don't think there's much down-side for a reference to always provide a positives reviews. Just keep in mind that an experience recruiter will probably realize this too (they've probably been burned before), and have some clever ways to ferret out the key info they're after.
Recruiter and former CTO here. References are a box-ticking exercise that you pay someone like Experian to do, so that you can say it was done as part of a security review.
