CC Resolution No. 1983 - Identity Theft Prevention Prog. RESOLUTION NO.1983
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS,
ADOPTING THE CITY OF BAYTOWN'S IDENTITY THEFT PREVENTION PROGRAM IN
ACCORDANCE WITH THE FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF
2003:AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WI�iEREAS.pursuant to the Fair and Accurate Credit Transactions Act of 2003.the City is required to adopt
an identity theft prevention program for its utility accounts by May 1,2009.
WHEREAS,the proposed program is designed to detect,prevent and mitigate identify theft in connection
with utility service accounts:and
WHEREAS.the proposed program assigns training and oversight responsibilities and contains provisions
for program updates:.NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN.TEXAS:
Section 1:All matters and facts set forth in the recitals above are found to be true and correct.
Section 2:The City Council of the City of Baytown adopts the City of Baytown's Identity Theft
Prevention Program in accordance with the Fair and Accurate Credit Transactions Act of 2003.which program is
attached hereto as Exhibit"A"and incorporated herein for all intents and purposes.
Section 3:This resolution shall take effect on May 1.2009.after its passage by the City Council of the
City of Baytown.
INTRODUCED,READ and PASSED,by the affirmative vote of the Council of the City of Baytown
this the 23rd day of April,2009.
ST HEN H.DONCARLOS.Major
A T T:
�0,1 T o�
A.en
R
Y DARNEL ity Clerk s 7P
0
APPROVED AS TO FORM:
NACIO RAMIREZ.SR..Ci n
ttorney
�%cobsry I legal\KaretffileKity CounciMesolutions\200"ril 2YRedFlagProgram.doc
E1 OU A
City of Baytown
Identity Theft Prevention Program
Effective:May 1,2009
I.ADOPTION OF PROGRAM AND GENERAL INFORMATION
The City of Baytown(the"City")has 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.
§681.2.This Program was developed for the City(the"Utility")with oversight from the Legal
and Finance Departments,and with approval of the City Council.After consideration of the
size and complexity of the Utility's operations and account systems,as well as the nature and
scope of the Utility's activities,the City Council determined that this Program was appropriate
for the City's Utilities,and therefore approved this Program on May 1,2009.
II.PROGRAM PURPOSE AND DEFINITIONS
A.Fulfilling 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:
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.
The City of Bayto«n's Program is designed to detect,prevent,and diminish identity
theft in connection with the opening and maintaining of utility accounts;to establish
written procedures for the security and storing of personal information;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.Red Flag Rule definitions used in this Program
1)Identity Theft-A fraud committed using the identifying infonnation of another
person.
2)Red Flag-A pattern,practice,or specific activity that indicates the possible
existence of Identity Theft.
3)Creditors-Includes 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.According to the Rule,a municipal utility is a creditor subject
to the Rule requirements.
4)Covered Account-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:
•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.
5)Identifying information-Any name or number that may be used,alone or in
conjunction with any other information,to identify a specific person,including the
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.
C.This policy applies to all City of Baytown employees and service providers that
have access to the Utility's customer's identifying information.
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.Red Flags for Suspicious Documents
When opening a new account,personnel need to carefully scrutinize documents
submitted for identification or proof of residency for red flags such as:
1)Documents provided appear to be altered.forged or unauthentic;
2)The photograph or physical description on the identification is not consistent with
the appearance of the customer requesting service;
3)Other information is not consistent with information provided by the person
requesting service;and
4)Application for service that appears to have been altered or forged.
3
B.Red Flags for Suspicious Personal Identifying Information
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:
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 and/or driver's license 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.
C.Red Flags for Suspicious Account Activity or Unusual Use of Account
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;
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.
D.Red Flag-Alerts from Others
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
Every application for new utility service requires verification of information.
Applications must be submitted by the responsible party.Parents,siblings,or any other
interested party cannot activate service on behalf of another person.
4
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;
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.
For accounts not opened in person,additional verification shall be required and the
cost thereof shall be borne by the person requesting service.
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 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 or written notification is received
and verified of fraudulent activity from a customer,banking institution,or law enforcement
agency,such personnel shall take one or more of the following steps,depending on the degree
of risk posed by the Red Flag:
A.Prevent and Mitigate
1)Notate the account.
2)Continue to monitor the account for evidence of Identity Theft;
3)Contact the customer;
4)Change any passwords or other security devices that permit access to accounts;
5)Not open a new account;
6)Close an existing account:
7)Reopen an account with a new number;
8)Notify the Program Administrator for determination of the appropriate step(s)to
take;
9)Notify law enforcement;and/or
5
10)Determine that no response is warranted under the particular circumstances.
A zero_tolerance policy of identity theft is in effect for all fraudulent transactions
within the City.
B.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 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)Ensure computer virus protection is up to date;and
6)Require and keep only the kinds of customer information that are necessary for
utility purposes.
C.Data Storage
Electronic
Personal identifying information related to covered accounts is transmitted and
stored electronically on the City's server.Access control methods have been put into
place to ensure that access to this information is granted only to those who require it
in order to perform their job duties.
Internal Database Securitv:
1)All appropriate employees undergo a background check prior to hiring.
2)Employees are assigned security levels based on their"need to know,"which
limits access to certain sensitive data and ability to alter data.
3)Access to the system requires a password protected account assigned by ITS.
Hard Copy Data Storage:
All hard copy information shall be stored in filing cabinets in a secured area in the
Utility Billing Customer Service Office.
6
Data Retention:
Records are disposed of in accordance with state and federal law,including the local
records retention schedule issued bythe Texas State Library and Archives Commission.
VI.PROGRAM UPDATES
The Utility Billing Manager will periodically review this Program to monitor changes in risks to
customers and the soundness of the Utility from Identity Theft.In doing so,the Utility Billing
Manager 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 Utility Billing Manager will determine whether changes to the Program,including
the listing of Red Flags,are warranted.If warranted,the Utility Billing Manager will present
the City Council with his/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 the
Utility Billing Manager.The Utility Billing Manager will be responsible for the
Program administration,for ensuring appropriate training of 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 Utility Billing Manager in the detection of Red Flags,and the
responsive steps to be taken when a Red Flag is detected.As staff is hired,training will
occur for each employee as a part of his/her initial training.
Other appropriate training needs will be identified as the City performs its Operational
Assessment of other departments within the City.Training will depend on those
findings.
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
7
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;and
2.Require.by contract,that service providers review the Utility's Program and report
any Red Flags to the Utility Billing Manager.;and
3.Require,by contract,that the service providers provide proof of compliance with the
Fair and Accurate Credit Transactions Act of 2003 and this policy.
8