HomeMy WebLinkAbout09-019 Approving and adopting an identity theft prevention program and delegating program adminRESOLUTION NO. 09-019
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, APPROVING AND ADOPTING AN IDENTITY THEFT PREVENTION
PROGRAM AND DELEGATING PROGRAM ADMINISTRATION TO THE FINANCE
DIRECTOR
WHEREAS, the City of Port Townsend is anon-charter code city providing water,
sewer, and storm drain utility services to its residents; and
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003, Pub. L. 108-159,
("Red Flags Rule") requires certain financial institutions and creditors with "covered accounts"
to prepare, adopt, and implement an identity theft prevention program to identify, detect, respond
to and mitigate patterns, practices or specific activities which could indicate identity theft; and
WHEREAS, the City maintains certain continuing accounts with utility service
customers and for other purposes which involve multiple payments or transactions, and such
accounts are "covered accounts" within the meaning of the Red Flags Rule; and
WHEREAS, to comply with the Red Flags Rule, City staff has prepared the attached
Identity Theft Prevention Program which is incorporated herein by this reference and have
recommended that the Program now be approved and adopted by the City Council for
implementation,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND
DOES RESOLVE AS FOLLOWS:
Section 1. The attached Identity Theft Prevention Program is hereby approved and
adopted effective the date set forth below.
Section 2.The Finance Director is hereby authorized and directed to implement the
Identity Theft Prevention Program in accordance with its terms.
ADOPTED by the City Council of the City of Port Townsend at a regular meeting
thereof; held this fourth day of May, 2009.
Attest:
Pamela Kolacy, MMC
City Clerk ~"
Michelle Sandoval, Mayor
Approved as to form:
:,~-~
John P. Watts
City Attorney
Resolution U9-019
City of Port Townsend
Identity Theft Prevention Program
Effective beginning May 4, 2009
EFF. DATE: 5/1/09
ISSUE DATE:
REFERENCE:
5/1/09
Federal Trade
Commission's Red Flag Rule
FINANCE POLICY #:
TITLE: Identity Theft Prevention
APPROVED BY:
Section 114 of the Fair and Accurate Credit Transactions Act of 2003
Resolution No. 09-
policy applies to any account the City offers or maintains that involves multiple payments
or transactrons.
I. PROGRAM ADOPTION
The City of Port Townsend developed this Identity Theft Prevention Program pursuant to the
Federal Trade Commission's Red Flags Rule, which implements Section ] 14 of the Fair and
Accurate Credit Transactions Act of 2003. 16 C. F. R. § 681.2. Phis Program was developed
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 of Port
Townsend, and therefore approved this Program on the 1st day of May 2009.
IL PROGRAM PURPOSE AND DEFINITIONS
A. Fu1611ing 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:
Identify relevant Red Flags fox new and existing covered accounts and
incorporate those Red Flags into the Program; and
Detect Red Flags that have been incorporated into the Program; and
Respond appropriately to any Red Flags that are detected to prevent and mitigate
Identity Theft; and
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
Resolution 09-019
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 City'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 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. "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 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:
A. Notifications and Warnings From Credit Reporting Agencies
Red Flags
1. Report of fraud accompanying a credit report; and
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. Notice or report from a credit agency of an address discrepancy; and
5. Indication from a credit report of activity that is inconsistent with a customer's
usual pattern or activity.
B. Suspicious Documents
Red Flags
1. Identification document or card that appears to be forged, altered or inauthentic;
and
Reso(uzzon U9-019
2. Identification document or card on which a person's photograph or physical
description is not consistent with the person presenting the document; and
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 Floes
1. Identifying information presented that is inconsistent with other information the
customer provides (example: inconsistent birth dates); and
?. Identifying information presented that is inconsistent with other sources of
information (for instance, an address not matching an address on a credit report);
and
3. Identifying information presented that is the same as information shown on other
applications that were found to be fraudulent; and
4. Identifying information presented that is consistent with fraudulent activity (such
as an invalid phone number or fictitious billing address); and
5. Social security number presented that is the same as one given by another
customer; and
6. An address or phone number presented that is the same as that of another person;
and
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 Floes
1. Change of address for an account followed by a request to change the account
holder's name; and
2. Payments stop on an otherwise consistently up-to-date account; and
3. Account used in a way that is not consistent with prior use (example: very high
activity); and
4. Mail sent to the account holder is repeatedly returned as undeliverable; and
5. Notice to the City that a customer is not receiving mail sent by the City; and
6. Notice to the City that an account has unauthorized activity; and
7. Breach in the City's computer system security; and
8. Unauthorized access to or use of customer account information.
E. Alerts from Others
Red Floes
1. Notice to the City 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 Thefr.
IV. DETECTING RED FLAGS
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A. New Accounts
In order to detect any of the Red Flags identified above associated with the opening
of a new account, City's Customer Services 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; and
2. Verify the customer's identity (for instance, review a driver's license or other
identification card); and
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,
Customer Service personnel will take the following steps to monitor transactions with
an account:
Detect
1. Verify the identification of customers if they request information (in person, via
telephone, via facsimile, via email); and
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 IDENTITY 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 Miti¢ate
1. Continue to monitor an account for evidence of Identity Theft; and
2. Contact the customer; and
3. Change any passwords or other security devices that permit access to accounts;
and
4. Not open a new account; and
5. Close an existing account; and
6. Reopen an account with a new number; and
7. Notify the Program Administrator fox determination of the appropriate step(s) to
take: and
8. Notify law enforcement; or
9. Determine that no response is warranted under the particular circumstances.
Protect customer identifyin2 information.
Resolulaon 09-079
In order to 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:
1. Ensure that its website is secure or provide clear notice that the website is not
secure; and
2. Ensure complete and secure destruction of paper documents and computer files
containing customer information; and
3. Ensure that office computers axe password protected and that computer screens
lock after a set period of time; and
4. Keep offices clear of papers containing customer information; and
5. Request social security numbers (if any); and
6. Ensure computer virus protection is up to date; and
7. Require and keep only the kinds of customer information that aze necessary for
City purposes.
VI. PROGRAM UPDATES
This Program will be periodically reviewed and updated to reflect changes in risks to customers
and the soundness of the program to prevent Identity Theft. 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. 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 and implement the revised Program.
VII. PROGRAM ADMINISTRATION
A. Oversight
Responsibility for developing, implementing and updating this Program lies with the
Finance Director. The Finance Director will be responsible for the following:
• administering the program; and
• developing procedures to implement the policy; and
• ensuring appropriate training of City staff on the Program; and
• reviewing staff reports regarding the detection of Red Flags and the steps for
• preventing and mitigating Identity Theft; and
• 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
Customer Service 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 Customer Services staff shall prepare a report at least annually for the Program
Resolution 09-019
Administrator, including an evaluation of the effectiveness of the Program with respect to
opening accounts, existing covered accounts, service provider arrangements, significant
incidents involving identity theft and responses, and recommendations for changes to the
Program.
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.
] . Require, by contract, that service providers have such policies and procedures in
place; and
2, Require, by contract, 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 Thefr
detection, prevention and mitigation. Therefore, under this Program, knowledge of such
specific practices is to be limited to the Management 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.
The identifying information of the City customers with covered accounts shall be kept
confidential and shall be exempt from public disclosure to the maximum extent
authorized by law, including RCW 42.56.230(4). "Credit card numbers, debit card
numbers, electronic check numbers. card expiration dates, or bank or other financial
account numbers, except when disclosure is expressly required by or governed by other
law."
Resolulion 09-019