511 Red Flag Identity Theft PreventionCITY OF YELM
WASHINGTON
RESOLUTION NO.511
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF YELM, WASHINGTON, APPROVING AND
ADOPTING AN IDENTITY THEFT PREVENTION
PROGRAM.
WHEREAS, the City has a public utility providing water and/or storm water
utility services pursuant to Title 57 RCW; and
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003, Pub. L. 108-
159 ("Red Flags Rule"), 16 C.F.R. Part 681, 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 have prepared an
identity theft prevention program in the form attached hereto as Exhibit "A" and
incorporated herein by this reference (the "ITPP" or the "Program") 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 YELM,
WASHINGTON, DOES RESOLVE AS FOLLOWS:
Section 1. The Program, as set forth in Exhibit "A," is hereby approved and
adopted effective the date set forth below. City staff are hereby authorized and directed
to implement the Program in accordance with its terms.
Section 2. Severability. Should any section, paragraph, sentence, clause or
phrase of this Resolution, or its application to any person or circumstance, be declared
unconstitutional or otherwise invalid for any reason, or should any portion of this
Resolution be pre-empted by state or federal law or regulation, such decision or pre-
emption shall not affect the validity of the remaining portions of this Resolution or its
application to other persons or circumstances.
IDENTITY THEFT PREVENTION PROGRAM
Appendix A to Resolution No. 511
Page 1 of 2
PASSED BY THE CITY COUNCIL AT A REGULAR MEETING THEREOF ON THE
11 TH DAY OF MAY, 2010.
CITY OF YELM
~~
Ro ert Isom, Mayor Pro-Tem
ATTEST/AI:ITHENTICATED:
1'~ ~ /~CG~~Gl2G
7 ine Schn f Cit Clem;
eP ~ Y
Passed by the City Council: OS-11-10
Resolution No.511
IDENTTTY THEFT PREVENTION PROGRAM
Appendix A to Resolution No. S 11
Page 2 of 2
CITY OF YELM
IDENTITY THEFT PREVENTION PROGRAM
"EXHIBIT A"
I. PROGRAM ADOPTION
The City of Yelm developed this Identity Theft Prevention Program ("Program")
pursuant to the Federal Trade Commission's Red Flags Rule ("Rule"), which implements
Sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003. This
Program was developed with the oversight and approval of the City's Finance Director.
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, and therefore approved this Program by
the adoption of Resolution No. 511 on the 11~` day of May, 2010.
II. PROGRAM PURPOSE AND DEFINITIONS
A. Fulfilling Requirements of the Red Fla sg Rule.
Under the Red Flags 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:
• Identify relevant red flags as defined in the Ruie and this Program for new and
existing covered accounts, and incorporate those red flags into the Program;
• Detect red flags that have been incorporated into the Program;
• Respond appropriately to any red flags that are detected to prevent and mitigate
identity theft; and
• Update the Program periodically to reflect changes in risks to customers or to the
safety and soundness of the City from identity theft.
B. Red Flags Rule Definitions Used in this Pro„~ram.
For the purposes of this Program, the following definitions apply:
Account. "Account" means a continuing relationship established by a person
with a creditor to obtain a product or service for personal, family, household or business
purposes.
IDENTTI'Y THEFT' PREVENTION PROGRAM
Covered Account. A "covered account" means:
a. Any account the City offers or maintains primarily for personal, family
or household purposes, that involves multiple payments or transactions; and
b. 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.
Creditor. "Creditor" has the same meaning as defined in Section 701 of the
Equal Credit Opportunity Act, 15 U.S.C. 1691 a, and includes a person or entity that
arranges for the extension, renewal or continuation of credit, including the City.
Customer. A "customer" means a person or business entity that has a covered
account with the City.
Financial Institution. "Financial institution" means a state or national bank, a
state or federal savings and loan association, a mutual savings bank, a state or federal
credit union, or any other entity that holds a "transaction account" belonging to a
customer.
Identifying Information. "Identifying information" means any name or
number that may be used, alone or in conjunction with any other ;nformation, to identity
a specific person, including name, address, telephone number, social security number,
date of birth, government passport number, employer or taxpayer identification number
or unique electronic identification number.
Identity Theft. "Identity theft" means fraud committed using the identifying
information of another person.
Red Flay. A "red flag" means a pattern, practice, or specific activity that
indicates the possible existence of identity theft.
Service Provider. "Service provider" means a person or business entity that
provides a service directly to the City relating to or in connection with a covered account.
III. IDENTIFICATION OF RED FLAGS
In order to identify relevant red flags, the City shall review and consider the types
of covered accounts that it offers and maintains, the methods it provides to open covered
accounts, the methods it provides to access its covered accounts, and its previous
experiences with identity theft. The City identifies the following red flags, in each of the
listed categories:
IDENTITY THEFT PREVENTION PROGRAM
A. Notification and Warnings from Credit Reporting Agencies -Red Flags.
• Report of fraud accompanying a credit report;
• Notice or report from a credit agency of a credit freeze on a customer or
applicant;
• Notice or report from a credit agency of an active duty alert for an
applicant; and
• Indication from a credit report of activity that is inconsistent with a
customer's usual pattern or activity.
B. Sus,~icious Documents -Red Flags.
• Identification document or card that appears to be forged, altered or
inauthentic;
• Identification document or card on which a person's photograph or
physical description is not consistent with the person presenting the
document;
• Other document with information that is not consistent with existing
customer information (such as a person's signature on a check appears
forged); and
• Application for service that appears to have been altered or forged.
C. Suspicious Personal Identifying Information -Red Flags.
• Identifying information presented that is inconsistent with other
information the customer provides (such as inconsistent birth dates);
• Identifying information presented that is inconsistent with other sources of
information (for instance, an address not matching an address on a driver's
license);
• Identifying information presented that is the same as information shown
on other applications that were found to be fraudulent;
• Identifying information presented that is consistent with fraudulent
activity (such as an invalid phone number or fictitious billing address);
• Social security number presented that is the same as one given by another
customer;
IDENTITY THEFT PREVENTION PROGRAM
• An address or phone number presented that is the same as that of another
person;
• Failing 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
• Identifying information which is not consistent with the information that is
on file for the customer.
D. Suspicious Account Activity or Unusual Use of Account -Red Flags.
• Change of address for an account followed by a request to change the
account holder's name;
• Payments stop on an otherwise consistently up-to-date account;
• Account used in a way that is not consistent with prior use (such as very
high activity);
• Mail sent to the account holder is repeatedly returned as undeliverable;
• Notice to the City that a customer is not receiving mail sent by the City;
• Notice to the City that an account has unauthorized activity;
• Breach in the City's computer system security; and
• Unauthorized access to or use of customer account information.
E. Alerts from Others -Red Flas.
• Notice to the City from a customer, a victim of identity theft, a law
enforcement authority 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, City personnel will take the fallowing steps to obtain and verify the
identity of the person opening the account:
• 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;
IDENTITY THEFT PREVENTION PROGRAM
• Verify the customer's identity (for instance, review a driver's license or
other identification card);
• Verify new resident status:
^ Homeowner: Require documented proof of sale from the seller or
buyer.
^ Renter: Require a copy of the rental agreement from the
prospective renter, homeowner, or Management Company or a
letter from the property owner granting authorization for renter to
apply for utilities. The letter shall include contact information for
the owner for verification of information purposes.
• Review documentation showing the existence of a business entity; and
• Independently contact the customer.
B. Existine Accounts.
In order to detect any of the red flags identified above for an e%isting account,
City personnel will take the following steps to monitor transactions with an account:
• Verify the identification of customers if they request information (in
person, via telephone, via facsimile, via email);
• Verify the validity of requests to change billing addresses; and
• 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:
A. Prevent and Mitigate Identity Theft.
• Monitor a covered account for evidence of identity theft;
• Contact the customer with the covered account;
• Change any passwords or other security codes and devices that permit
access to a covered account;
• Not open a new covered account;
IDENTITY THEFT PREVENTION PROGRAM
• Close an existing covered account;
• Reopen a covered account with a new number;
• Not attempt to collect payment on a covered account;
• Notify the Finance Director for determination of the appropriate step(s) to
take;
• Notify law enforcement; or
• Determine that no response is warranted under the particular
circumstances.
B. Protect Customer Identifying Information.
In order to further prevent the likelihood of identity theft occurring with respect to
City accounts, the City shall take the following steps with respect to its internal operating
procedures to protect customer identifying information:
• Undertake complete and secure destruction of paper documents and
computer files containing customer information;
• Make office computers password protected and provide that computer
screens lock after a set period of time;
• Keep offices clear of papers containing customer identifying information;
• Continue to mask social security numbers in financial software system
except for the last four digits.
• Customer bank account information will be masked in the financial
software system and access to unmasked information will be restricted to
essential personnel.
• Enhance security access to customer accounts and records, limiting the
potential of wholesale theft of information. Changes to customer accounts
will be limited to pertinent staff only, with all other staff only having the
ability to view customer accounts.
• Maintain computer virus protection up to date; and
• Require and keep only the kinds of customer information that are
necessary for City purposes.
IDENTITY THEFT PREVENTION PROGRAM
VI. PROGRAM ADMINISTRATION
A. Oversight.
The Finance Director or other designated city employee at the level of senior
management shall be responsible for developing, implementing, and updating the
Program.
The Finance Director shall also be responsible for the Program administration, for
appropriate training of City staff on the Program, for reviewing the annual staff report
required under the Program, as well as any other 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.
City staff responsible for implementing the Program shall be trained either by or
under the direction of the Finance Director in the detection of red flags, and the
responsive steps to be taken when a red flag is detected. Additionally, an incident report
shall be provided to the Finance Director as they occur. An annual compliance report
shall be prepared by the Finance Duector and at a minimum address the following:
1. The effectiveness of the City's policies and procedures in addressing the
risk of identity theft in connection with the opening of covered accounts
and with respect to existing covered accounts;
2. Significant incidents involving identity theft and the City's response; and
3. Recommendations for material changes to the Program.
C. Service Provider Arrangements.
In the event the City engages a service provider to perform an activity in
connection with one or more covered accounts, the City shall take the following steps to
require that 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 acknowledge receipt and
review of the Program and agree to perform their activities with respect to
City covered accounts in compliance with the terms and conditions of the
Program and with all instructions and directives issued by the Finance
Director relative to the Program; or
• Require, by contract, that service providers acknowledge receipt and
review of the Program and agree to perform their activities with respect to
City covered accounts in compliance with the terms and conditions of the
IDENTITY THEFT PREVENTION PROGRAM
service provider's identity theft prevention program and will take
appropriate action to prevent and mitigate identity theft; and that the
service providers agree to report promptly to the City in writing if the
service provider in connection with a City covered account detects an
incident of actual or attempted identity theft or is unable to resolve one or
more red flags that the service provider detects in connection with a
covered account.
D. Customer Identifying Information and Public Disclosure.
The identifying information of 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). The City Council also finds and
determines that public disclosure of the City's specific practices to identity, detect,
prevent, and mitigate identify theft may compromise the effectiveness of such practices
and hereby direct that, under the Program, knowledge of such specific practices shall be
limited to the Finance Director and those City employees and service providers who need
to be aware of such practices for the purpose of preventing identity theft.
VII. PROGRAM UPDATES
The Program will be periodically reviewed and updated to reflect changes in risks
to customers and to the safety and soundness of the City from identity theft. The Finance
Director shalt at least annually prepare a compliance report and consider the City's
experiences with identity theft, 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 and service providers.
After considering these factors, the Finance Director shall determine whether changes to
the Program, including the listing of red flags, are warranted. If warranted, the Finance
Director shall present the recommended changes to the City Council for review and
approval.
IDENTITY THEFT PREVENTION PROGRAM