R298RESOLUTION NO. 298
A RESOLUTION ADOPTING A CITY OF KENNEDALE IDENTITY
THEFT PREVENTION PROGRAM (ITPP)
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003, Pub. L. 108-159,
("Red I lags 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
WHF,REAS, the City of Kennedale 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, the City Council has reviewed the City's Identity Theft Prevention
Program .
IvOW, THEREFORE, SE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF KENNEDALE, TEXAS:
The City Council of the City of Kennedale, Texas hereby approves the Identity
Theft Prevention Program dated November 5, 2009, attached hereto as "Exhibit
A."
MASSED, ADOPTED AND APPROVED by the City Council of the City of Kennedale,
Texas, this the 5th day of November 2009.
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APPROVED:
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Mayor, Bryan Lankhorst
Kathy Tu er, City Secretary
CITY OF KENNEDALE
IDENTITY THEFT PREVENTION PROGRAM
ADOPTED BY CITY COUNCIL: NOVEMBER 13, 2008
KENNE~ALE
PREFACE
The Federal Trade Commission (FTC) recently adopted rules on identity theft "red flags" (i.e., warning
signs) pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. The new rules, which
mandate action by November 1, 2008 (recently extended to May 1, 2009), require any business with a
"covered account" to adopt and implement an identity theft program. Most cities that operate a
municipal utility will be affected by these new rules.
A covered account is one where an entity (such as a municipal utility) provides a service or good
before the consumer pays for it. For example, most municipal water utilities provide water to the
customer, then the utility bills the customer later based on consumption.
A city with such accounts must adopt and implement a written program that: (1) identifies relevant
identity theft "red flags" to the utility or other covered entity; (2) provides for detection of those red
flags; (3) provides for appropriate responses to any red flags that are detected; and (4) ensures that
the program is updated periodically to address changing risks.
Red flags may include unusual account activity, altered identity documents that are used to apply for
an account, and a variety of other signs. Appropriate action in response to a red flag might include,
among other actions, verification of personal information, contacting the customer, or other action
that would prevent identity theft.
It is our intent to bring forth this ITPP to Council for review at least annually. In order to demonstrate
that review, it will be custom practice for the governing board of a municipality to adopt a resolution
to make the review an official public record.
SUBSEQUENT REVIEW & ADOPTION
NOVEMBER 13, 2008
NOVEMBER 5, 2009
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I. PROGRAM ADOPTION
The City of Kennedale ("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. § 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 November 13, 2008.
II. PURPOSE AND DEFINITIONS
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
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.
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:
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.
C. Red Flags Rule Definitions Used In This Program
1) City: The City of Kennedale, Texas.
2) Covered Account: Under the Rule, a "covered account" is:
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a) Any account the Utility offers or maintains primarily for personal, family
or household purposes, that involves multiple payments or transactions;
or
b) 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.
3) Creditors: 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."
4) 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.
5) Program: The Identity Theft Prevention Program for the City.
6) Program Administrator: The Director of Finance is the Program Administrator
for the Program.
7) Utility: The Utility is the Utility Department for the City.
II1. 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 Consumer Credit Reporting Agencies
1) 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:
• Recent and significant increase in volume of inquiries
• Unusual number of recent credit applications
• A material change in use of credit
• Accounts closed for cause or abuse
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B. Suspicious Documents
1) 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.
C. Suspicious Personal Identifying Information
1) 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 repot);
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.
D. Suspicious Account Activity or Unusual Use of Account
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1) 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.
E. Alerts from Others
1) Red Flag
a) 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.
IV. DETECTING RED FLAGS
A. New Accounts
In order to detect any of the Red Flags identified above associated with the opening of
anew account, Utility personnel will take the following steps to obtain and verify the
identity of the person opening the account:
1) Detect
a) 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;
b) Verify the customer's identity (for instance, review a driver's license or
other identification card);
c) Review documentation showing the existence of a business entity;
d) Request additional documentation to establish identity; and
e) Independently contact the customer or business.
B. Existing Accounts
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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:
2) Detect
a) Verify the identification of customers if they request information (in
person, via telephone, via facsimile, via email);
b) Verify the validity of requests to close accounts or change billing
addresses; and
c) 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:
A
B
Prevent and Mitigate
1) Continue to monitor an account for evidence of Identity Theft;
2) Contact the customer, sometimes through multiple methods;
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) Do not close the account, but monitor or contact authorities;
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; or
10) 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 website is not
secure;
2) Where and when allowed, 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) Change passwords on office computers on a regular basis;
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5) Ensure all computers are backed up properly and any backup information is
secured;
6) Keep offices clear of papers containing customer information;
7) Request only the last 4 digits of social security numbers (if any);
8) Ensure computer virus protection is up to date; and
9) 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. At least 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, 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.
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
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.
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All Utility staff shall submit reports as needed 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 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.
1) Require, by contract or contract amendment, that service providers have such
policies and procedures in place; and
Require, by contract or contract amendment, that service providers review the
Utility's Program and report any Red Flags t~ 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 Utility's specific practices relating to Identity
Theft detection, prevention and mitigation. Therefore, under this Program, knowledge
of such specific practices is 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.
VIII. ANNUAL REVIEW
It is recommended that The Director of Finance shall, at a minimum, submit proposed
amendments of this policy to the City Council annually.
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