This error indicates that the first letter of a student's UPN is incorrect. To check the UPN please go to the student profile (search the pupil name in the top right hand search bar), go to the extended tab and under the School Information heading please check the UPN here. This error would indicate that the letter at the start of the UPN is incorrect for the UPN number. If the pupil is new to your school you may need to confirm with the previous school if you believe this number to be correct.
You can find more information on UPNs from the DfE guidance found here.