Credit Privacy Number Fraud Developments

Prospective tenants seeking a “quick credit fix” have recently turned to the purchase of Credit Privacy Numbers (CPNs) as a way to bypass the screening of landlords.

CPNs are nine-digit numbers formatted like a Social Security Number (SSN); however, they are not issued by the Social Security Administration and are not backed by the government. In fact, these numbers are often randomly generated by CPN sellers or derived from stolen SSNs from individuals, including deceased individuals. CPNs are being sold by companies and on the dark web claiming you can use them as an opportunity to build credit or create a clean start, hiding bad credit history. While CPNs themselves are not illegal, the use of CPNs on a credit application requires providing false information for creditors to review which can be considered as fraud or identity theft.

A prospective tenant may substitute these numbers for their SSN on tenant applications as a means to hide a history of late payments, a past eviction, or bankruptcy. Without targeted verification measures, these numbers may appear legitimate and show a clean or limited credit history for the applicants, luring a landlord to accept their application.

Not knowing the real identity or history of a tenant can pose significant risks. The use of CPNs on a tenant screening application prevents landlords from completing a meaningful review of a tenant’s history. As a result, prospective applicants may be able to secure leases with no intention or ability to pay rent, requiring landlords to quickly seek eviction for non-payment of rent. This can lead to significant costs for landlords, including losses in rent and legal fees.

Fueled by social media, this trend is on the rise. Recent reports highlight a large increase in rental applications that involved fraud or identity theft. Prosecution of this fraudulent scheme can be challenging, requiring varying legal strategies and substantial financial burdens for landlords.

Given the rising fraud in the industry, it is important to use thorough application screening practices to flag and report the use of CPNs. Further, processes should be in place to obtain additional required documentation to verify a potential applicant’s identity and records. Specifically, landlords should require applicants to provide SSNs and photo IDs. A robust investigation into an applicant’s credit, rental, and employment history, as well as proof of income will help verify their identity and help protect landlords from fraud. We will continue to monitor developments and provide further guidance when available.