Identity theft is one of the most common crimes in the US, but it’s also one of the most preventable. Jason Hartman, along with Kerry Lutz, covered the broad topic of how to prevent identity theft in this episode of the Creating Wealth podcast. The pair discussed different types of identity theft and what people can do to protect themselves and reduce their risks of falling victim to having their identity stolen.

Hartman and Lutz also covered the continued dismantling of the Dodd-Frank Act, something Hartman has long predicted since Trump was elected to office. They mentioned the hand that Elizabeth Warren played in the creation of the CFPB, as well as the way that she misrepresented herself as an American Indian.

How to Prevent Identity Theft: Big Data Still Gets Confused

Jason Hartman announces that he has two topics of discussion to cover in this episode, that are important to both investors and people in general. One topic is that of identity theft, types of identity theft, and how to prevent identity theft. The second topic is Dodd-Frank and the changes this entity is undergoing under the Trump administration. For years, Dodd-Frank has been stifling the economy and the real estate market. He is joined again by Kerry Lutz.

Hartman recalls that when it comes to how to prevent identity theft, he has had five known occasions of close brushes with it. A few weeks ago, he received a call from his credit card company asking him if he’d just spent $700 at Ashley Furniture. He states that he told them he did not, and the company had to cancel his card and send him a new one being that someone else was attempting to use the number.

He explains that there are several different forms of identity theft, and while people usually think of it as someone opening an unauthorized account in their name, these people can also exchange their criminal history with yours, as well as stealing your health information.

He cites a recent story about a New Mexico woman who was jailed for 49 days under mistaken identity. Apparently, the woman tried explaining that the police arrested the wrong person, but as a commonly heard excuse, they didn’t believe her.

Lutz adds that they only realized that she was telling the truth after fingerprinting her and wonders why they didn’t take the woman’s prints at the beginning rather than 49 days after the fact.

Hartman mentions that Lutz used to teach seminars when he was a lawyer on ID databases and how other lawyers could use them.

Lutz explains that big data could get confused, as at some point, the information was inputted manually. Because of this, the room for human error rears its head. He recalls when a federal judge in New York had the same name as a deadbeat, and somehow their credit reports were merged. As a result, his accounts were frozen, and there was nothing to be done about it until the issue was resolved.

Hartman on How to Prevent Identity Theft

Hartman states that there are several ways that people can learn how to prevent identity theft, and his first piece of advice would be to invest in a good, cross-cut paper shredder. It’s important to shred all of your mail before you throw it away. Sometimes even the envelop has personal information printed on it, and this opens the door for thieves to access your information.

Lutz adds that another good idea would be to lock down your credit reports. If you subscribe to each bureau’s monitoring service, you can remotely lock your reports from either your PC or your phone. You have the option to unlock your reports as needed.

Financial agencies will not be able to pull the reports unless you’ve unlocked them and unfortunately with three credit bureaus, you have to subscribe to each individual monitoring service. There is no application available to lock all three simultaneously, but fortunately, the monitoring systems are instant. This is much better than having to wait for several weeks to lock and unlock via mail-in letter.

Lutz mentions that if you’re able to lock two of the three reports, you’re still contributing to your security, and you’re probably protected reasonably well.

Your Phone May Be Your Biggest Threat

Hartman states that he’s heard of several different identity theft protection companies but does not have a big opinion on them. People have to do something to protect themselves and keeping your records confidential is a good step in how to prevent identity theft. Set up strong passwords on websites you use and use a different password for everything.

He mentions that it’s amazing how many people leave their phones and computers open, adding that he doesn’t like letting people even touch his PC.

He notes that several times, he has noticed old ladies on planes that don’t have their phones protected. When he notices this, he will politely remind the lady and help her lock her phone if she needs the assistance.

For a lot of online accounts, there is a two-step verification needed to sign in, which is a good thing. Be sure to have this enabled. This way, when you log in on a site, it will send a text message to your phone with a code you need to input in order to complete the process. This feature makes it difficult for people to get into your accounts unless they’ve got your phone.

Lutz adds that it’s also a good idea to encrypt your PC. Most PCs have this ability, but it isn’t always a default setting. You’ve got to go into your settings and encrypt your PC manually.

The UBS and Microsoft Scams

Hartman mentions that he was at dinner the other night in Palm Springs and was in the company of wealthy older people. He sat next to a woman who had been an anchorwoman for many years. Her husband passed away, and afterward, she experienced two big rip-offs. She was actually suing UBS because they were preying on wealthy widows and she happened to be one of the people they targeted.

He explains that this woman lost a lot of money to this scam, but that he didn’t have the heart to ask her exactly how much she lost. She then adds that she also fell for the “Microsoft” scam, where a scammer called her phone and convinced her that he worked at Microsoft and her PC was sending errors to them. They logged into her PC with a trojan after being granted access.

Hartman states that he has received a couple of those calls in the past, and he yelled at the caller until they hung up. He reminds listeners that Microsoft does not perform these sorts of calls and remembering this is an easy step to how to prevent identity theft.

Lutz emphasizes how important it is to have all of your devices locked down and encrypted whenever possible. This removed about 80% of the risk.

Some Things You NEED to Know as an Investor

Hartman explains that some of his listeners are self-managers, which can be great as well as slightly dangerous. There are several things to consider in order to ensure your success.

He recalls talking to an owner the other day, who was mentioning his property. He then started discussing what “color” people in the area were and how the neighborhood was changing.

He explained to the owner that it was not in good taste to make remarks like that, and as an investor, you have to be colorblind. When it comes to fair housing, there are many issues that come about, even something as simple as familial housing. For example, most people don’t use the term “family room” anymore and have replaced it with “great room” as it might be considered discriminatory toward people who do not have families.

Hartman uses himself as an example. He does not have a family, though he does want one despite Lutz attempting to talk him out of it.

Lutz colorfully refers to Hartman’s attitude as “the triumph of hope over experience.”

Hartman reminds investors that, in addition to avoiding these remarks in public, it’s important not to say things like this to your property managers as well, as it encourages discriminatory behavior.

The Latest News on Dodd-Frank

how to prevent identity theftHartman explains that Dodd-Frank is in the news recently. For listeners who aren’t fully aware of it, Dodd-Frank is a big legislation that’s complicated to understand. It came out as a result of the housing crisis and Chris Dodd and Barney Frank didn’t know the real world of banking or business when they designed it. The agency is now facing changes under the Trump administration.

Lutz mentions that one of these changes raises the definition in dollar terms of these “too big to fail” banks from $50 billion to $250 billion, and that will effectively take a lot of the regulation off smaller community banks and credit unions. This will allow them to offer qualified mortgages as well as more flexibility when writing mortgages. The debt to income ratio in the application is changing.

Hartman wonders if this is a sign of lending getting too liberal again, but Lutz doesn’t believe so, as they have not brought back wire loans. He states that the worst of these was the stated-income loan where a candidate could state that they made a lot more money than they actually did with no repercussions.

Hartman recalls that a few minutes before recording the episode, he and Lutz were talking about the CFPB and how it was set up by the Democrats.

Changes Between Cordray and Mulvaney

Lutz mentions that Elizabeth Warren somehow became a guru on consumer finance, though she only worked for the government and Harvard at cushy jobs that she only obtained because she lied and said she was an American Indian. Warren insists that this never happened.

Her project was later the CPFB, of which she wanted to be the head. Republicans were not interested in her, but since the Democrats were in charge, they pushed the project through. Dodd-Frank created the CFPB, which had jurisdiction over things that several other agencies already had jurisdiction over. This includes the FTC, the Fed, and the Treasury. All the powers the CFPB had were already held.

Lutz adds that if you’re a Republican, don’t bother applying there as they were against hiring non-Democrats. The CFPB had no accountability to Congress and they were funded by a levy on the Fed. Congress did not allocate their money.

The head of the agency, Richard Cordray, hot a 10-year term where he could have only been removed with cause. He did not have to answer any questions Congress had, and when Trump was elected, Cordray resigned before he was able to be fired. The president appointed Mick Mulvaney as the new head. Cordray attempted to appoint his lead hack and was told he wasn’t allowed to do that. He went to court and lost the case because it was determined that the president was in charge of appointment.

Lutz then explains that Elizabeth Warren decided that she was going to write a long letter to Mulvaney, chalked full of questions, and Mulvaney answered her the same way that Cordray pulled before, explaining that he didn’t have to answer any of her questions. He was not accountable to her.

With the CFPB, the Democrats spent more money on PR than any other agency in the government. A lot of money was spent on headquarters that are over the top, and these people interfered with the financial system. You might notice if you’ve gotten a mortgage in the last five years, it takes longer and there are more disclosures, Lutz says.

Good and Bad Changes for Investors

Hartman explains that these changes can be both good and bad for investors. Many people complain about how hard it is to get financing completed, being that so much paperwork is required. There’s a flipside to this, however, as it is hard for everyone else as well. The difficulty provides a barrier to entry, where those who are willing to put forth the effort are the ones who succeed. Much like firms in Wall Street stating that they don’t like the regulations they’ve got, while they do, because it creates a barrier. The cost of regulatory compliance for the little guy is too much to bear, and it keeps competition at bay for these “too big to fail” companies.

Lutz mentions one final note on Mulvaney before closing. He fired the 25-member advisory board and stated that he would launch a new panel in the fall. The last panel had every hack consumer-advocate in place, and they were doing a good job of sabotaging the financial sector. Mulvaney was one of those who was against it and warned about the risks while no one listened to him.

Upcoming Event

Hartman reminds listeners not to plan a tropical vacation this year, because they can come and have it with him. The first week in November will be the launch of a new two-day conference in a tropical location, and the following week will be the Venture Alliance retreat in a nearby tropical location. The conference will cover real estate and economic topics.

For more information on or questions for Kerry Lutz, visit