HomeMy WebLinkAboutResolution No. 08-096
CITY OF THE COLONY
RESOLUTION NO. 08- tJ1fJJ
OR/G/N4L
A RESOLUTION APPROVING THE UTILITY ADMINISTRATION
IDENTITY THEFT PREVENTION PROGRAM FOR THE CITY OF THE
COLONY; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council must adopt and approve an Identity Theft
Prevention Program for the Utility Department of The Colony pursuant to the Federal
Trade Commission's Red Flags Rule, which implements Section 114 of the Fair and
Accurate Credit Transactions Act of2003, 16 C. F. R. S 681.2.; and
WHEREAS, the City Council desire to adopt the Identity Theft Prevention
Program in compliance with Federal law.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY
COUNCIL OF THE CITY OF THE COLONY, TEXAS that:
SECTION 1: The City Council of the City of The Colony hereby adopts and
approves the Identity Theft Prevention Program of the City of The Colony, which is
attached hereto and incorporated by reference as if set forth in full as Exhibit A.
SECTION 2: The Identity Theft Prevention Program as adopted herein shall
govern the procedures and strategies for prevention of identity theft for the City's Utility
Department in compliance with Federal law.
SECTION 3: This resolution shall become effective immediately from and after
its passage and approval.
PASSED AND APPROVED this 20th day of October. 2008.
ATTEST:
S2J'
Utility Administration
Identity Theft Prevention PrograDl
Effective beginning October 20. 2008 , 2008
I. PROGRAM ADOPTION
The Utility Administration Department of The Colony, Texas ("Utility") 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. S 681.2. This Program was developed with oversight and approval of the
City Council. After consideration ofthe 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 Administration Department of The Colony, Texas, and
therefore approved this Program on Oct. 20 ,2008.
II. PROGRAM PURPOSE AND DEFINITIONS
A. Fulfilling requirements of the Red Flags 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.
Accordingly, this program contains 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, the 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."
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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 defmed 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:
a. name;
b. Address;
c. telephone number;
d. social security number;
e. date of birth;
f. government issued driver's license or identification number;
g. alien registration number;
h. government passport number;
1. employer or taxpayer identification number;
J. unique electronic identification number;
k. computer's Internet Protocol address; or
l. routing code.
ID. 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
o Report of fraud accompanying a credit report;
o Notice or report from a credit agency of a credit freeze on a customer or applicant;
o Notice or report from a credit agency of an active duty alert for an applicant; and
o Indication from a credit report of activity that is inconsistent with a customer's usual pattern
or activity.
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B. Suspicious Documents
Red Flags
o Identification document or card that appears to be forged, altered or inauthentic;
o Identification document or card on which a person's photograph or physical description is
not consistent with the person presenting the document;
o 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
o Application for service that appears to have been altered, forged and/or destroyed and
reassembled.
c. Suspicious Personal Identifying Information
Red Flags
o Identifying information presented that is inconsistent with other information the customer
provides (example: inconsistent birth dates);
o Identifying information presented that is inconsistent with other sources of information (for
instance, an address not matching an address on a credit report);
o Identifying information presented that is the same as information shown on other
applications that were found to be fraudulent;
o Identifying information presented that is consistent with fraudulent activity (such as an
invalid phone number or fictitious billing address);
o Social security number presented that is the same as one given by another customer;
o An address or phone number presented that is the same as that of another person;
o 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
o 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
o Change of address for an account followed by a request to change the account holder's name;
o Payments stop on an otherwise consistently up-to-date account;
o Account used in a way that is not consistent with prior use (example: very high activity);
o Mail sent to the account holder is repeatedly returned as undeliverable;
o Notice to the Utility that a customer is not receiving mail sent by the Utility;
o Notice to the Utility that an account has unauthorized activity;
o Breach in the Utility's computer system security; and
o Unauthorized access to or use of customer account information.
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E. Alerts from Others
Red Flag
o 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 identifying information such as name, date of birth, residential and/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:
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 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:
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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 internal operating procedures to
protect customer identifying information:
1. Ensure that its website is secure or provide clear notice that the web site 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
7. Require and keep only the kinds of customer information that are necessary for utility
purposes.
VI. PROGRAM UPDATES
This Program will be periodically reviewed and updated to reflect changes in risks to
customers and the soundness of the Utility from Identity Theft. Annually, 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 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.
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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.
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 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; and
3. Require, by contract, that service providers notify the Program Administrator of any security
incidents, even if such incidents had not lead to any confIrmed compromise of the Utilities
data.
D. Specific Program Elements and Confidentiality
For the effectiveness ofIdentity 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.
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