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 C.F.R. section 681.2. This program was developed for
the utility department of the city (“utility”) with oversight
and approval of the city council. 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 city
council determined that this program was appropriate for the city’s
utility and therefore approved this program on September 14, 2009.
(Ordinance 09-054, ex. A, adopted 9/14/09)
(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” (“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.
(c)
Covered account.
(1)
(2)
Creditors.
Identifying information.
Program.
Program administrator.
Utility.
Red flags rule definitions used in this program:
Under the rule, a “covered account” is:
Any account the utility offers or maintains primarily for personal,
family or household purposes, that involves multiple payments or transactions;
and
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.
The rule defines creditors “to include finance companies,
automobile dealers, mortgage brokers, utility companies, and telecommunications
companies. Where nonprofit and government entities defer payment for
goods or services, they, too, are to be considered creditors.”
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.
The identity theft prevention program for the city.
The finance director is the program administrator for the
program.
The utility is the utility department for the city.
(Ordinance 09-054, ex. A, adopted 9/14/09)
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 consumer credit reporting agencies
red flags.
(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:
(2)
Suspicious documents red flags.
(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 red flags.
(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 red flags.
(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 utility that a customer is not receiving mail sent
by the utility:
(F)
Notice to the utility that an account has unauthorized activity;
(G)
Breach in the utility’s computer system security; and
(H)
Unauthorized access to or use of customer account information.
(5)
Alerts from others red flag.
Notice to the utility 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 09-054, ex. A, adopted 9/14/09)
(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)
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 (retain a copy
of the identifying information);
(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, utility 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 by requesting all changes in writing; and
(3)
Verify changes in banking information given for billing and payment
purposes.
(Ordinance 09-054, ex. A, adopted 9/14/09)
In the event utility 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;
(D)
Not open a new account;
(E)
Close an existing account;
(F)
Do not close the account, but monitor or contact authorities;
(G)
Reopen an account with a new number;
(H)
Notify the program administrator for determination of the appropriate
step(s) to take;
(I)
Notify law enforcement; or
(J)
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)
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)
Request only the last 4 digits of Social Security numbers (if any);
(H)
Ensure computer virus protection is up to date; and
(I)
Require and keep only the kinds of customer information that are
necessary for utility purposes.
(Ordinance 09-054, ex. A, adopted 9/14/09)
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 annually, the program administrator will
consider the utility’s experiences with identity theft situations,
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, 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 09-054, ex. A, adopted 9/14/09)
(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 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.
(1)
Initially, all utility 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 utility staff shall undergo update training not less
than annually. Additionally, all new utility employees shall undergo
training.
(2)
All utility staff shall submit reports monthly concerning the utility’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.
(c)
Service provider arrangements.
In the event the utility
engages a service provider to perform an activity in connection with
one or more accounts, including but not limited to franchise utility
providers, 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:
(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 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 09-054, ex. A, adopted 9/14/09)
