HomeMy WebLinkAboutRES NO 055-09
RESOLUTION NO. 0 5 5 09
A RESOLUTION ADOPTING
IDENTITY THEFT PREVENTION PROGRAM
WHEREAS, the Federal Trade Commission ("FTC") has adopted regulations that
require "creditors" holding consumer or other "covered accounts" (which are defined to
mean any account where customer payment information is collected in order to bill for
services rendered) to develop and implement by May 1, 2009 an identity theft
prevention program that complies with those regulations; and
WHEREAS, because the City of Bakersfield (the "City") provides refuse and
waste water service to its customers, it is a "creditor" under the applicable FTC
regulations and must therefore comply with those regulations by adopting and
implementing an identity theft prevention program, and
WHEREAS, the City Council desires to take action to comply with the applicable
FTC regulations by adopting an identity theft prevention program,
NOW, THEREFORE, IT IS RESOLVED that the Council of the City of Bakersfield
hereby adopts, and directs City staff to implement, the following identity theft prevention
program.
1. Program Goals. The City's Identity Theft Prevention Program (the
"Program") shall endeavor to achieve the following goals:
A. To identify relevant patterns, practices and specific activities (referred
to in this Program as "Red Flags") that signal possible identity theft
relating to information maintained in the City's customers' accounts,
both those currently existing and those accounts to be established in
the future;
B. To detect Red Flags after the Program has been implemented;
C. To respond promptly and appropriately to detected Red Flags to
prevent or mitigate identity theft relating to City customer account information;
and
D. To ensure the Program is updated periodically to reflect any necessary
changes.
2. The Program.
A. The City shall assess the security of its current customer account
system, with an emphasis on assessing the methods by which it opens and
maintains customer accounts and customers' personal information, and on
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assessing the manner in which it provides access to customer accounts. That
assessment shall include an analysis of any prior incidents of identity theft which
the City has experienced.
B. The City shall maintain identifying information (address, pin
numbers, etc.) for each customer so it can authenticate customers, monitor
transactions, and verify the validity of customer requests, such as a change of
address or service-related requests, including requests to terminate service.
C. The City shall establish a reporting system which allows City staff to
discover potential Red Flags as they arise and to thereafter report them to the
proper authorities, including law enforcement. This reporting system should
specifically focus on the following Red Flags: alerts, notifications, or other
warnings received from consumer reporting agencies or service providers;
presentation of suspicious documents by a purported customer; presentation of
suspicious personal identifying information by a purported customer, such as a
specific address change; the unusual use of, or other suspicious activity related
to, a customer's account; and notice from customers, victims of identity theft, law
enforcement authorities, or other persons regarding possible identity theft in
connection with the City's customer accounts.
D. The City shall adopt procedures which provide for appropriate
responses to any detected Red Flags which are commensurate with the degree
of risk posed. In determining an appropriate response, the City shall consider
aggravating factors that may heighten the risk of identity theft, such as a data
security incident that results in unauthorized access to a customer's account
records, or notice that a customer has provided information related to a
customer's account to someone fraudulently claiming to represent the City.
Appropriate responses include the following: i) monitoring customer accounts for
evidence of identity theft, ii) contacting the customer, iii) changing from time to
time any passwords, security codes, or other security devices that permit access
to customer accounts, iv) reopening a customer account with a new account
number, v) not opening a new customer account, vi) closing an existing customer
account, vii) notifying law enforcement, and viii) determining that no response is
warranted under the particular circumstances. Any Red Flags should be brought
to the City Manager's attention to determine the appropriate response(s) to be
implemented promptly after detection.
E. The City Manager, or his or her designee, shall implement and
administer the Program. The City Manager shall provide periodic reports to the
Budget and Finance committee on the effectiveness of the Program and shall
ensure that all necessary City employees are properly trained to implement the
Program.
F. The City Manager shall annually review the Program with appropriate
City staff to determine if any revisions are needed. That review may include
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changes in identity theft methods and changes in methods to detect, prevent,
and mitigate identity theft. The City Manager is hereby authorized and directed
to make any necessary changes in the Program that are found to be necessary;
provided that such changes be reported to the Council of the City of Bakersfield
as soon as practical after the change is made.
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted, by the
Council of the City of Bakersfield at a regular meeting thereof held on
MAY 2 0 20og by the following vote:
AYES COUNCILMEMBER CARS O ON, BENHAM, WEIR, OUCH HAN ON, SULLIVAN, SCRIVNER
S: COUNCILMEMBER rlorle
ABSTAIN: COUNCILMEMBER 00r)e
ABSENT: COUNCILMEMBER nOne
aIALAL ~C CI&L
PAMELA A. McCARTHY, C
CITY CLERK and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED: MAY 2 0,#09
By
HARVEY L. HALL
Mayor
APPROVED AS TO FORM:
VIRGINIA GENNARO, CITY ATTORNEY
By
JOSHUA H. RUDNICK
eputy City Attorney
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EXHIBIT "A"
City of Bakersfield
Identity Theft Prevention Program
Effective beginning May 1, 2009
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I. PROGRAM ADOPTION
The City of Bakersfield ("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. This Program was developed with oversight and approval by the Council of the
City of Bakersfield. After consideration of the size and complexity of the City's
operations and account systems, and the nature and scope of the City's activities, the
City Council determined that this Program was appropriate for the City of Bakersfield,
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.
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, 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:
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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;
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.
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.
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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;
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 City that a customer is not receiving mail sent by the City;
6. Notice to the City that an account has unauthorized activity;
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 Flag
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 Theft.
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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, City 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, match information with county tax
records);
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,
City 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 City 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;
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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
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;
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. At least
annually, the City Manager or his designee will consider the Utility's experiences with
Identity Theft, 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 City Manager will determine whether changes to the Program are
warranted. If warranted, the City Manager will update the Program and present the
recommended changes to the City Council. The City Council will make a determination
of whether to accept, modify or reject those changes to the Program.
VII. STAFF TRAINING AND REPORTS
Utility staff responsible for implementing the Program shall be trained either by,
or under the direction of the City Manager, in the detection of Red Flags, and the
responsive steps to be taken when a Red Flag is detected.
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VIII. 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 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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