HomeMy WebLinkAboutRes 2009-04-06 Adopting an Identity Theft Policy.pdfCITY OF ANNA, TEXAS
RESOLUTION NO. 2009-04-06
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS,
ADOPTING AN IDENTITY THEFT POLICY IN ACCORDANCE WrrH AN
AMENDMENT TO THE FAIR AND ACCURATE CREDIT TRANSACTION ACT OF
2003; PROVIDING A SEVERABILITY CLAUSE AND DECLARING AN EFFECTIVE
DATE.
WHEREAS, a recent amendment to the Fair and Accurate Credit Transactions Act of
2003 requires the development of an identity theft prevention program; and
WHEREAS, the new rules are scheduled to become effective May 1, 2009 and require
municipal utilities and other departments to implement an identity theft prevention
program; and
WHEREAS, this resolution is being passed in full accordance with all requirements of
State law, including but not limited to the Open Meeting Act; and
WHEREAS, the City Council of the City of Anna, Texas determines that the passage of
this resolution is in the best interest of the public.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
Section 1. Recitals Incorporated.
All matters set forth herewith are found to be true and correct, are incorporated herein
by reference as if copied in their entirety, and are adopted by the City of Anna, Texas
('cCity").
Section 2. Adoption of Policy.
The City hereby adopts the policy attached to this resolution as Exhibit fAA" and
incorporates same by reference herein to be the City's Identity Theft Prevention
Program.
Section 3. Severability.
It is hereby declared to be the intention of the City, that sections, paragraphs, clauses,
and phrases of this resolution are severable, and if any section, paragraph, clause or
phrase of this resolution shall be declared unconstitutional or illegal by the valid
judgment or decree of any court of competent jurisdiction, such unconstitutionality or
illegality shall not affect any of the remaining phrases, clauses, sentences, paragraphs
or sections of this resolution since the same would have been enacted by the City
Res. 2009-04-06 Adopting Identity Theft Policy.doc 1 04-28-09
without the incorporation in this resolution of any such unconstitutional or illegal section,
paragraph, clause or phrase.
Section 4. Passage.
This resolution shall be in full force and effect from and after the date of its passage.
PASSED AND APPROVED by the City Council of the City of Anna, Texas this the 28th
day of April, 2009.
ArrESTED: APPROVED:
Res. 2009-04-06 Adopting Identity Theft PoIicy.doc 2 04-28-09
IDENTITY THEFT PREVENTION PROGRAM
I.
PROGRAM ADOPTION
The City of Anna, Texas (It Utility") developed this Identity Theft Prevention
Program ("Programlt) 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. § 681.2. This Program was developed with
oversight and approval of the City Council of the City of Anna, Texas ("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 Utility, and
therefore approved this Program on the 28th day of April, 2009.
II.
PROGRAM PURPOSE AND DEFINITIONS
A. Fulfilling requirements of the Red Flaas Rule
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. 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. Rule definitions used in this Program
The 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."
EXHIBIT A -Page 1
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.
III.
IDENTIFICATION OF RED FLAGS.
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:
A. Notifications and Warnings From Credit Reporting AgenCies
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 a 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.
EXHIBIT A -Page 2
B. Suspicious Documents
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.
c. Suspicious Personal Identifying Information
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.
D. Suspicious Account Activity or Unusual Use of Account
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;
EXHIBIT A -Page 3
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.
E. Alerts from Others
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.
IV.
DETECTING RED FLAGS.
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:
Detect
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; and
4. 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:
EXHIBIT A -Page 4
Detect
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 change billing addresses; and
3. Verify changes in banking information given for billing and payment
purposes.
v.
PREVENTING AND MITIGATING IDEN-riTY THEFT
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:
Prevent and Mitigate
1. Continue to monitor an account for evidence of Identity Theft;
2. Contact the customer;
3. Change any passwords or other security devices that permit access to
accounts;
4. Not open a new account;
5. Close an existing account;
6. Reopen an account with a new number;
7. Notify the Program Administrator for determination of the appropriate
step(s) to take;
8. Notify law enforcement; or
9. Determine that no response is warranted under the particular
circumstances.
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 intemal operating procedures to protect customer identifying information:
1. Ensure that its website is secure or provide clear notice that the website is
not secure;
2. Ensure complete and secure destruction of paper documents and
computer files containing customer information;
3. Ensure that office computers are password protected and that computer
screens lock after a set period of time;
4. Keep offices clear of papers containing customer information;
5. Request only the last 4 digits of social security numbers (if any);
6. Ensure computer virus protection is up to date; and
EXHIBIT A -Page 5
7. Require and keep only the kinds of customer information that are
necessary for Utility purposes.
VI.
PROGRAM UPDATES
The Program Administrator will periodically review and update this
Program to reflect changes in risks to customers and the soundness of the Utility
from Identity Theft. In doing so, 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, 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 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.
VII.
PROGRAM ADMINISTRATION.
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
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.
Staff will provide reports to the Program Administrator on incidents of
Identity Theft, the Utility's compliance with the Program and the effectiveness of
the Program.
EXHIBIT A -Page 6
c. Service Provider Arrangements
In the event the Utility engages a service provider to perform an activity in
connection with one 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 Identity pOlicies and
procedures designed to detect, prevent and mitigate the risk of Identity
Theft in place; and
2. Require, by contract, that service providers review the Utility's Program
and report any Red Flags to the Program Administrator.
D. Non-disclosure of Specific Practices
For the effectiveness of this Program, knowledge about specific Red Flag
identification, detection, mitigation and prevention practices must be limited to the
Identity Theft Committee who developed this Program and to those employees
with a need to know them. Any documents that may have been produced or are
produced in order to develop or implement this program that list or describe such
specific practices and the information those documents contain are considered
unavailable to the public because disclosure of them would be likely to
substantially jeopardized the security of information against improper use, that
use being to circumvent the Utility's Identity Theft prevention efforts in order to
facilitate the commission of Identity Theft.
If a request is received for such information, City staff will request an
opinion from the Texas Attorney General as to whether or not such information is
public, citing concerns in regard to Identity Theft and federal laws requiring
prevention of Identity Theft.
EXHIBIT A -Page 7