The city developed this identity theft prevention program (“program”)
pursuant to the Federal Trade Commission's Red Flags Rule (“rule”),
which implements section 114 of the Fair and Accurate Credit Transactions
Act of 2003. 16 CFR § 681.2. This program was developed for use
by the city with oversight and approval by the city council. After
consideration of the size and complexity of the city's operations
and account systems, and the nature and scope of the city's activities,
the city council determined that this program was appropriate for
the city.
(Ordinance 55 adopted 7/27/10)
(a) Establish an identity theft prevention program.
To establish
an identity theft prevention program designed to detect, prevent and
mitigate identity theft in connection with the opening of a covered
account or an existing covered account and to provide for continued
administration of the program in compliance with part 681 of title
16 of the Code of Federal Regulations implementing sections 114 and
315 of the Fair and Accurate Credit Transactions Act (FACTA) of 2003.
(b) Establishing and fulfilling requirements of the red flags rule.
(1) The red flags rule (“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.”
(2) Under the 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. The program must
contain reasonable policies and procedures to:
(A) Identify relevant red flags for new and existing covered accounts
and incorporate those red flags into the program;
(B) Detect red flags that have been incorporated into the program;
(C) Respond appropriately to any red flags that are detected to prevent
and mitigate identity theft; and
(D) 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.
(Ordinance 55 adopted 7/27/10)
City.
The City of Bee Cave, Texas.
Covered account.
Under the rule, a covered account is:
(1)
Any account the city offers or maintains primarily for personal,
family or household purposes, that involves multiple payments or transactions;
and
(2)
Any other account the city offers or maintains for which there
is a reasonably foreseeable risk to customers or to the safety and
soundness of the city from identity theft.
Creditors.
The rule defines creditors “to include finance companies,
automobile dealers, mortgage brokers, city companies, and telecommunications
companies. Where non-profit and government entities defer payment
for goods or services, they, too, are to be considered creditors.”
Identifying information.
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.
Program.
The identity theft prevention program for the city.
Program administrator.
The city manager, or his/her designee, who shall be at a
senior management employee level, is the program administrator for
the program.
(Ordinance 55 adopted 7/27/10)
In order to identify relevant red flags, the city 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 city
identifies the following red flags, in each of the listed categories:
(1) Notifications and warnings from consumer credit reporting agencies.
(A) Report of fraud accompanying a consumer credit report;
(B) Notice or report from a consumer credit agency of a credit freeze
on a customer or applicant;
(C) Notice or report from a consumer credit agency of an active duty
alert for an applicant; and
(D) Indication from a consumer credit report of activity that is inconsistent
with a customer's usual pattern or activity, including but not limited
to:
(i) Recent and significant increase in volume of inquiries.
(ii)
Unusual number of recent credit applications.
(iii)
A material change in use of credit.
(iv)
Accounts closed for cause or abuse.
(2) Suspicious documents.
(A) Identification document or card that appears to be forged, altered
or inauthentic;
(B) Identification document or card on which a person's photograph or
physical description is not consistent with the person presenting
the document;
(C) 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
(D) Application for service that appears to have been altered or forged.
(3) Suspicious personal identifying information.
(A) Identifying information presented that is inconsistent with other
information the customer provides (example: inconsistent birth dates,
lack of correlation between Social Security number range and date
of birth);
(B) Identifying information presented that is inconsistent with other
sources of information (for instance, Social Security number or an
address not matching an address on a credit report);
(C) Identifying information presented that is the same as information
shown on other applications that were found to be fraudulent;
(D) Identifying information presented that is consistent with fraudulent
activity (such as an invalid phone number or fictitious billing address);
(E) Social Security number presented that is the same as one given by
another customer;
(F) An address or phone number presented that is the same as that of
another person;
(G) 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) or an applicant cannot provide information
requested beyond what could commonly be found in a purse or wallet;
and
(H) 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) Change of address for an account followed by a request to change
the account holder's name;
(B) Payments stop on an otherwise consistently up-to-date account;
(C) Account used in a way that is not consistent with prior use (example:
very high activity);
(D) Mail sent to the account holder is repeatedly returned as undeliverable;
(E) Notice to the city that a customer is not receiving mail sent by
the city;
(F) Notice to the city that an account has unauthorized activity;
(G) Breach in the city's computer system security; and
(H) Unauthorized access to or use of customer account information.
(5) Alerts from others.
Notice to the city from a customer,
identity theft victim, fraud detection service, law enforcement or
other person that it has opened or is maintaining a fraudulent account
for a person engaged in identity theft.
(Ordinance 55 adopted 7/27/10)
(a) New accounts.
In order to detect any of the red flags
identified above associated with the opening of a new account, city
personnel will take the following steps to obtain and verify the identity
of the person opening the account:
(1) Require certain identifying information such as name, date of birth,
residential or business address, principal place of business for an
entity, driver's license or other identification;
(2) Verify the customer's identity (for instance, review a driver's license
or other identification card);
(3) Review documentation showing the existence of a business entity;
(4) Request additional documentation to establish identity; and
(5) Independently contact the customer or business.
(b) Existing accounts.
In order to detect any of the red
flags identified above for an existing account, city personnel will
take the following steps to monitor transactions with an account:
(1) Verify the identification of customers if they request information
(in person, via telephone, via facsimile, via email);
(2) Verify the validity of requests to close accounts or change billing
addresses; and
(3) Verify changes in banking information given for billing and payment
purposes.
(Ordinance 55 adopted 7/27/10)
(a) In
the event city personnel detect any identified red flags, such personnel
shall take one 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;
(B) Contact the customer, sometimes through multiple methods;
(C) Change any passwords or other security devices that permit access
to accounts;
(E) Close an existing account;
(F) Do not close the account, but monitor or contact authorities;
(G) Not attempting to collect on a covered account, including not selling
a covered account to a debt collection entity;
(H) Reopen an account with a new number;
(I) Notify the program administrator for determination of the appropriate
step(s) to take;
(J) Notify law enforcement; or
(K) 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 city accounts, the city 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) Where and when allowed, 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) Change passwords on office computers on a regular basis;
(E) Ensure all computers are backed up properly and any backup information
is secured;
(F) Keep offices clear of papers containing customer information;
(G) Ensure that all afterhours payment centers are secured to prevent
access externally;
(H) Request only the last 4 digits of Social Security numbers (if any);
(I) Secure any customer account numbers which can be linked with other
customer information;
(J) Ensure computer virus protection is up to date; and
(K) Require and keep only the kinds of customer information that are
necessary for city purposes.
(Ordinance 55 adopted 7/27/10)
This program will be periodically reviewed and updated to reflect
changes in risks to customers and the soundness of the city from identity
theft. At least annually, the program administrator will consider
the city'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 city maintains and changes
in the city's business arrangements with other entities, consult with
law enforcement authorities, and consult with other city personnel.
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 city council with his or her recommended
changes and the city council will make a determination of whether
to accept, modify or reject those changes to the program.
(Ordinance 55 adopted 7/27/10)
(a) Oversight.
Responsibility for developing, implementing
and updating this program lies with the program administrator. The
program administrator will be responsible for the program administration,
for ensuring appropriate training of city 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.
(1) Initially, all city staff 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.
Thereafter, all city staff shall undergo update training not less
than annually. Additionally, all new city employees shall undergo
training.
(2) All city staff shall submit reports annually to the program administrator
concerning the city's compliance with the program, the training that
has been given and the effectiveness of the policies and procedures
in addressing the risk of identity theft, including recommendations
for changes to the program. While incidents of identity theft are
to be reported immediately to the program administrator, the monthly
reports shall contain a recap of the incident and include the steps
taken to assist with resolution of the incident. The program administrator
shall provide an annual report to the city council addressing the
items identified in this subsection.
(c) Service provider arrangements.
In the event the city
engages a service provider to perform an activity in connection with
one or more accounts, including but not limited to franchise utility
providers, the city 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 or contract amendment, that service providers
have such policies and procedures in place; and
(2) Require, by contract or contract amendment, that service providers
review the city'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 city's specific
practices relating 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.
(Ordinance 55 adopted 7/27/10)