Recently, property managers have become increasingly worried about Credit Profile Number (CPN) fraud. CPNs are often marketed to applicants as legitimate alternatives to Social Security numbers and to help hide poor credit history.
This fraudulent practice poses several risks if it goes undetected. Property managers won’t know their tenants’ true identities, leading to potential financial losses from defaulting tenants, property damage, legal liability, and damage to their reputation.
What is CPN Fraud?
A CPN, known as a credit privacy number, consists of nine digits and looks just like a Social Security number (SSN). CPNs are commonly promoted as a solution for individuals with unfavorable credit histories, offering a supposed way to establish a false credit identity.
Companies that sell CPNs will claim that you can use a CPN instead of an SSN to apply for credit with your new credit identity. However, using a CPN for fraudulent purposes is illegal and can result in severe consequences, including fines and imprisonment.
Keen observers can easily detect warning signs indicating the involvement of CPN sellers in questionable activities. While SSNs are free, CPNs come at a cost, sometimes reaching thousands of dollars. They may request false details like a different address, phone number, or email when using a CPN for credit applications. Despite claiming to safeguard your identity, they are actually encouraging you to fabricate a false identity.
How to stay protected
CPN fraud is aggressively policed by federal and state agencies. People are actively getting arrested over this issue and you don’t want to be caught in that web.
If you encounter suspicious offers for CPNs or other credit-related scams, be sure to report them to the Federal Trade Commission (FTC) and your state attorney general’s office. You can validate SSN/CPN numbers for free through US SSA.
It’s important to note that someone using a CPN would only be able to bypass a credit check but couldn’t get a fake ID or doctored income documents through the leasing process, so they would still be caught.
How does Snappt stop CPN fraud?
At Snappt, our technology checks the validity of income documents and IDs; it doesn’t perform credit checks. An applicant using a fake ID or bank statement would still be caught by our system, regardless of using a CPN or SSN.
This means that having a thorough, robust screening process is the best way to catch fraudsters. Simply relying on a credit check allows an applicant to use a CPN and sneak past your defenses. However, if your process includes a multilayered approach (credit check, background check, fraud detection, ID verification, and references), the odds of a fraudster slipping through the cracks are significantly reduced.
When it comes to credit checks, it’s important to verify which company you are working with. TransUnion is a reliable and well-known company, but there are plenty of other options that could be viable. Do your homework and pick a trustworthy company with a good history of reporting credit information correctly.
In addition, as fraudsters become more sophisticated in their tactics, it’s important to ask your chosen credit check company about their procedures for detecting CPN fraud. This could include cross-checking personal information with government databases or using advanced algorithms to identify red flags.
Investing in a multilayered defense
As we mentioned, relying solely on a credit check is not enough. At Snappt, we believe in a comprehensive approach to screening applicants. Even with multiple measures in place, fraudsters may still manage to evade detection. It is crucial to collaborate with a proactive fraud detection company to address these challenges effectively.
That’s why Snappt created an extra shield against fraudulent activities via our dedicated Fraud Forensics team. Every day, this team researches fraudsters’ tools and tactics, leveraging this insight to enhance our system and proactively address new threats.
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