[Ord. No. 9.130 §1, 10-6-2008]
The City of California developed this Identity Theft Prevention
Program pursuant to the Federal Trade Commission's Red Flags Rule,
which implements Section 114 of the Fair and Accurate Credit Transactions
Act of 2003 16 C.F.R. Section 681.2. This program was developed with
oversight and approval of the Board of Aldermen. After consideration
of the size and complexity of the utility's operations and account
systems, and the nature and scope of the utility's activities, the
Board of Aldermen determined that this program was appropriate for
the City of California, and therefore approved this program on October
6, 2008.
[Ord. No. 9.130 §1, 10-6-2008]
A. Fulfilling Requirements Of The Red Flags Rule. Under the
Red Flag Rule, every financial institution and creditor is required
to establish an "Identity Theft Prevention Program" tailored to its
size, complexity and the nature of its operation. Each program must
contain reasonable policies and procedures to:
1. Identify relevant red flags for new and existing covered accounts
and incorporate those red flags into the program;
2. Detect red flags that have been incorporated into the program;
3. Respond appropriately to any red flags that are detected to prevent
and mitigate identity theft; and
4. Ensure the program is updated periodically to reflect changes in
risks to customers or to the safety and soundness of the creditor
from identity theft.
B. Red Flags Rule Definitions Used In This Program. The Red
Flags Rule defines "identity theft" as "fraud committed
using the identifying information of another person" and a "red flag" as a pattern, practice, or specific activity
that indicates the possible existence of identity theft.
According to the Rule, a "municipal utility" is a creditor subject to the Rule requirements. The Rule defines "creditors" "to include finance companies, automobile dealers,
mortgage brokers, utility companies, and telecommunications companies.
Where non-profit and government entities defer payment for goods or
services, they, too, are to be considered creditors".
All the utility's accounts that are individual utility service
accounts held by customers of the utility whether residential, commercial
or industrial are covered by the Rule. Under the Rule, a "covered
account" is:
1. Any account the utility offers or maintains primarily for personal,
family or household purposes, that involves multiple payments or transactions;
and
2. Any other account the utility offers or maintains for which there
is a reasonably foreseeable risk to customers or to the safety and
soundness of the utility from identity theft.
"Identifying information" is defined under
the Rule as "any name or number that may be used, alone or in conjunction
with any other information, to identify a specific person", including:
name, address, telephone number, social security number, date of birth,
government-issued driver's license or identification number, alien
registration number, government passport number, employer or taxpayer
identification number, unique electronic identification number, computer's
Internet Protocol address, or routing code.
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[Ord. No. 9.130 §1, 10-6-2008]
A. In
order to identify relevant red flags, the utility considers the types
of accounts that it offers and maintains, the methods it provides
to open its accounts, the methods it provides to access its accounts,
and its previous experiences with identity theft. The utility identifies
the following red flags in each of the listed categories:
1. Notifications and warnings from credit reporting agencies.
a. Red flags.
(1)
Report of fraud accompanying a credit report;
(2)
Notice or report from a credit agency of a credit freeze on
a customer or applicant;
(3)
Notice or report from credit agency of an active duty alert
for an applicant; and
(4)
Indication from a credit report of activity that is inconsistent
with a customer's usual pattern or activity.
2. Suspicious documents.
a. Red flags.
(1)
Identification document or card that appears to be forged, altered
or inauthentic;
(2)
Identification document or card on which a person's photograph
or physical description is not consistent with the person presenting
the document;
(3)
Other document with information that is not consistent with
existing customer information (such as if a person's signature on
a check appears forged); and
(4)
Application for service that appears to have been altered or
forged.
3. Suspicious personal identifying information.
a. Red flags.
(1)
Identifying information presented that is inconsistent with
other information the customer provides (example: inconsistent birth
dates);
(2)
Identifying information presented that is inconsistent with
other sources of information (for instance, an address not matching
an address on a credit report);
(3)
Identifying information presented that is the same as information
shown on other applications that were found to be fraudulent;
(4)
Identifying information presented that is consistent with fraudulent
activity (such as an invalid phone number or fictitious billing address);
(5)
Social security number presented that is the same as one given
by another customer;
(6)
An address or phone number presented that is the same as that
of another person;
(7)
A person fails to provide complete personal identifying information
on an application when reminded to do so (however, by law social security
numbers must not be required); and
(8)
A person's identifying information is not consistent with the
information that is on file for the customer.
4. Suspicious account activity or unusual use of account.
a. Red flags.
(1)
Change of address for an account followed by a request to change
the account holder's name;
(2)
Payments stop on an otherwise consistently up-to-date account;
(3)
Account used in a way that is not consistent with prior use
(example: very high activity);
(4)
Mail sent to the account holder is repeatedly returned as undeliverable;
(5)
Notice to the utility that a customer is not receiving mail
sent by the utility;
(6)
Notice to the utility that an account has unauthorized activity;
(7)
Breach in the utility's computer system security; and
(8)
Unauthorized access to or use of customer account information.
5. Alerts from others.
a. Red flag.
(1)
Notice to the utility from a customer, identity theft victim,
law enforcement or other person that it has opened or is maintaining
a fraudulent account for a person engaged in identity theft.
[Ord. No. 9.130 §1, 10-6-2008]
A. New Accounts. In order to detect any of the red flags identified
above associated with the opening of a new account, utility personnel
will take the following steps to obtain and verify the identity of
the person opening the account:
1. Detect.
a. Require certain identifying in information such as name, date of
birth, residential or business address, principal place of business
for an entity, driver's license or other identification;
b. Verify the customer's identity (for instance, review a driver's license
or other identification card);
c. Review documentation showing the existence of a business entity;
and
d. Independently contact the customer.
B. Existing Accounts. In order to detect any of the red flags
identified above for an existing account, utility personnel will take
the following steps to monitor transactions with an account:
1. Detect.
a. Verify the identification of customers if they request information
(in person, via telephone, via facsimile, via e-mail);
b. Verify the validity of requests to change billing addresses; and
c. Verify changes in banking information given for billing and payment
purposes.
[Ord. No. 9.130 §1, 10-6-2008]
A. In
the event utility personnel detect any identified red flags, such
personnel shall take one (1) or more of the following steps, depending
on the degree of risk posed by the red flag:
1. Prevent and mitigate.
a. Continue to monitor an account for evidence of identity theft;
c. Change any passwords or other security devices that permit access
to accounts;
e. Close an existing account;
f. Reopen an account with a new number;
g. Notify the Program Administrator for determination of the appropriate
step(s) to take;
h. Notify law enforcement; or
i. Determine that no response is warranted under the particular circumstances.
2. Protect customer identifying information. In order
to further prevent the likelihood of identity theft occurring with
respect to utility accounts, the utility will take the following steps
with respect to its internal operating procedures to protect customer
identifying information:
a. Ensure that its website is secure or provide clear notice that the
website is not secure;
b. Ensure complete and secure destruction of paper documents and computer
files containing customer information;
c. Ensure that office computers are password protected and that computer
screens lock after a set period of time;
d. Keep offices clear of papers containing customer information;
e. Request only the list four (4) digits of social security numbers
(if any);
f. Ensure computer virus, protection is up to date; and
g. Require and keep only the kinds of customer information that are
necessary for utility purposes.
[Ord. No. 9.130 §1, 10-6-2008]
This program will be periodically reviewed and updated to reflect
changes in risks to customers and the soundness of the utility from
identity theft. At least yearly, the Program Administrator will consider
the utility's experiences with identity theft situation, changes in
identity theft methods, changes in identity theft detection and prevention
methods, changes in types of accounts the utility maintains and changes
in the utility's business arrangements with other entities. After
considering these factors the Program Administrator will determine
whether changes to the program, including the listing of red flags,
are warranted. If warranted, the Program Administrator will update
the program or present the Board of Aldermen with his or her recommended
changes and the Board of Aldermen will make a determination of whether
to accept, modify or reject those changes to the program.
[Ord. No. 9.130 §1, 10-6-2008]
A. Oversight. Responsibility for developing, implementing and
updating this program lies with an identity theft Committee for the
utility. The Committee is headed by a Program Administrator who may
be the head of the utility or his or her appointee. Two (2) or more
other individuals appointed by the head of the utility or the Program
Administrator comprise the remainder of the Committee membership.
The Program Administrator will be responsible for the program administration,
for ensuring appropriate training of utility staff on the program,
for reviewing any staff reports regarding the detection of red flags
and the steps for preventing and mitigating identity theft, determining
which steps of prevention and mitigation should be taken in particular
circumstances and considering periodic changes to the program.
B. Staff Training And Reports. Utility staff responsible for
implementing the program shall be trained either by or under the direction
of the Program Administrator in the detection of red flags, and the
responsive steps to be taken when a red flag is detected. (The utility
may include in its program how often training is to occur. The program
may also require staff to provide reports to the Program Administrator
on incidents of identity theft, the utility's compliance with the
program and the effectiveness of the program.)
C. Service Provider Arrangements. In the event the utility
engages a service provider to perform an activity in connection with
one (1) or more accounts, the utility will take the following steps
to ensure the service provider performs its activity in accordance
with reasonable policies and procedures designed to detect, prevent
and mitigate the risk of identity theft.
1. Require, by contract, that service providers have such policies and
procedures in place;
2. Require, by contract, that service providers review the utility's
program and report any red flags to the Program Administrator.
D. Specific Program Elements And Confidentiality. For the effectiveness
of identity theft prevention programs, the red flag rule envisions
a degree of confidentiality regarding the utility's specific practices
related to identity theft detection, prevention and mitigation. Therefore,
under this program, knowledge of such specific practices are to be
limited to the Identity Theft Committee and those employees who need
to know them for purposes of preventing identity theft. Because this
program is to be adopted by a public body and thus publicly available,
it would be counterproductive to list these specific practices here.
Therefore, only the program's general red flag detection, implementation
and prevention practices are listed in this document.