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City of Muskegon
OFFICIAL POLICY & PROCEDURE
2008-90(e)
TITLE: EFFECTIVE DATE:
IDENTITY THEFT PREVENTION PROGRAM October 29, 2008
Purpose
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 the Federal Trade
Commission's Red Flags Rule (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.
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.
Definitions
Identifying information means 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.
Identify theft means fraud committed or attempted using the identifying information of another
person without authority.
A covered account means:
1. An account that a financial institution or creditor offers or maintains, primarily for
personal, family, or household purposes that involves or is designed to permit multiple
payments or transactions. Covered accounts include credit card accounts, mortgage
loans, automobile loans, margin accounts, cell phone accounts, utility accounts, checking
accounts and savings accounts; and
Identity Theft Prevention Program
Effective October 29, 2008
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2. Any other account that the financial institution or creditor offers or maintains for which
there is a reasonably foreseeable risk to customers or to the safety and soundness of the
financial institution or creditor from identity theft, including financial, operational,
compliance, reputation or litigation risks.
A redflag means a pattern, practice or specific activity that indicates the possible existence of
identity theft.
Policy
A. IDENTIFICATION OF RED FLAGS. The City identifies the following red flags, in
each of the listed categories:
1. Suspicious Documents
1. Identification document or card that appears to be forged, altered or
inauthentic;
ii. Identification document or card on which a person’s photograph or physical
description is not consistent with the person presenting the document;
iil. 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
iv. Application for service that appears to have been altered or forged.
2. Suspicious Personal Identifying Information
1, Identifying information presented that is inconsistent with other information
the customer provides (example: inconsistent birth dates);
il. Identifying information presented that is inconsistent with other sources of
information (for instance, an address not matching an address on a credit
report);
ii. Identifying information presented that is the same as information shown on
other applications that were found to be fraudulent;
iv, Identifying information presented that is consistent with fraudulent activity
(such as an invalid phone number or fictitious billing address);
Vv. Social security number presented that is the same as one given by another
customer;
vi. An address or phone number presented that is the same as that of another
person;
vii. 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
viti. A person’s identifying information is not consistent with the information that
is on file for the customer.
Identity Theft Prevention Program
Effective October 29, 2008
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3. Suspicious Account Activity or Unusual Use of Account
i. Change of address for an account followed by a request to change the account
holder's name;
li. Payments stop on an otherwise consistently up-to-date account;
iii. | Account used in a way that is not consistent with prior use (example: very
high activity);
iv. Mail sent to the account holder is repeatedly returned as undeliverable;
v. Notice to the City that a customer is not receiving mail sent by the City;
vi. Notice to the City that an account has unauthorized activity;
vii. | Breach in the City's computer system security; and
vili, | Unauthorized access to or use of customer account information.
4. Alerts from Others
i. 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.
B. DETECTING RED FLAGS.
1. 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:
i. 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;
u. Verify the customer's identity (for instance, review a driver's license or other
identification card);
iii, Review documentation showing the existence of a business entity; and/or
iv. Independently contact the customer.
2. 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:
i. Verify the identification of customers if they request information (in person,
via telephone, via facsimile, via email);
ui. _—- Verify the validity of requests to change billing addresses; and
ii. Verify changes in banking information given for billing and payment
purposes.
C, 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:
Identity Theft Prevention Program
Effective October 29, 2008
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1. Prevent and Mitigate
i. Continue to monitor an account for evidence of Identity Theft;
ii. Contact the customer;
ill. Change any passwords or other security devices that permit access to
accounts;
iv. Not open a new account;
Vv. Close an existing account;
Vi. Reopen an account with a new number;
vil. Notify the City Manager for determination of the appropriate step(s) to take;
vill. Notify law enforcement; and/or
ix. Determine that no response is warranted under the particular circumstances.
2. Protect customer identifying information
L 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:
i. Ensure that its website is secure or provide clear notice that the website is not
secure;
iii. Ensure complete and secure destruction of paper documents and computer
files containing customer information;
Iv. Ensure that office computers are password protected and that computer
screens lock after a set period of time;
v. Keep offices clear of papers containing customer information;
vi. Safeguard all credit card information, checks, ACH information, bankruptcy
statements, or other personal financial information at all times;
Vii. Ensure computer virus protection is up to date; and
viii. Require and keep only the kinds of customer information that are necessary
for utility purposes.
D. PROGRAM UPDATES. This Program will be periodically reviewed and updated to
reflect changes in risks to customers and the soundness of the City from Identity Theft.
The City Manager will consider the City’s experiences with Identity Theft situations,
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. After considering these factors, the City
Manager will determine whether changes to the Program, including the listing of Red
Flags, are warranted. If warranted, the City Manager will present the City Commission
with his/her recommended changes and the City Commission will make a determination
of whether to accept, modify or reject those changes to the Program.
Identity Theft Prevention Program
Effective October 29, 2008
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E. PROGRAM ADMINISTRATION,
1. Oversight. Responsibility for developing, implementing and updating this Program
hes with the Reengineering Committee for the City. The Committee is headed by
the
Finance Director, with the City Treasurer, Income Tax Administrator / Deputy
Treasurer, Information Systems Director and Assistant Finance Director comprisin
g
the remainder of the committee membership. The Reengineering Committe
e will be
responsible for the Program administration, for ensuring appropriate training of City
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.
2. Staff Training and Reports. City staff responsible for implementing the Program
shall be trained either by or under the direction of the Reengineering Committee in
the detection of Red Flags, and the responsive steps to be taken when a Red Flag is
detected. City staff is required to provide reports to the Program Administrator on
incidents of Identity Theft, the City's compliance with the Program and the
effectiveness of the Program.
3. Specific Program Elements and Confidentiality. For the effectiveness of Identity
Theft prevention Programs, the Red Flag Rule envisions a degree of confidentiality
regarding the City’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 Reengineering 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.
Authority & Revisions
This policy is enacted immediately upon approval of the City Commission, as reflected in the
regular meeting minutes dated October 28, 2008. Revisions to this policy shall only be enacted
when approved by the City Commission and reflected in the applicable meeting minutes.
This
policy shall be reviewed at least biennially by the City Manager and updated as appropriate.
Revision History
Date Revision # Nature of Revision
10/28/08 Original document.
\ 7 i\e . “y i?
Adopted: October 28, 2008. SAy SAL NV ke ne a
Ann Marie Becker, MMC, City Clerk
CITY OF MUSKEGON
Resolution No. 2008-90(e)
Resolution to Adopt Identity Theft Prevention Program
WHEREAS pursuant to federal law the Federal Trade Commission adopted Identity Theft Rules
requiring the creation of certain policies relating to the use of consumer reports, address
discrepancy and the detection, prevention and mitigation of identity theft;
WHEREAS the Federal Trade Commission regulations, adopted as 16 CFR § 681.2 require
creditors, as defined by 15 U.S.C. § 1681a(x)(5) to adopt red flag policies to prevent and
mitigate identity theft with respect to covered accounts;
WHEREAS 15 U.S.C. § 168la(r)(5) cites 15 U.S.C. § 1691a, which defines a creditor as a
person that extends. renews or continues credit, and defines ‘credit’ in part as the right to
purchase property or services and defer payment therefore,
WHEREAS the Federal Trade Commission regulations include utility companies in the
definition of creditor;
WHEREAS the City of Muskegon is a creditor with respect to 16 CFR § 681.2 by virtue of
providing utility services or by otherwise accepting payment for municipal services in arrears;
WHEREAS the Federal Trade Commission regulations define ‘covered account in part as an
account that a creditor provides for personal, family or household purposes that is designed to
allow multiple payments or transactions and specifies that a utility account is a covered account;
WHEREAS the Federal Trade Commission regulations require each creditor to adopt an Identity
Theft Prevention Program which will use red flags to detect, prevent and mitigate identity theft
related to information used in covered accounts,
WHEREAS the City provides water and sewer utility services for which payment is made after
the product is consumed or the service has otherwise been provided which by virtue of being
utility accounts are covered accounts;
WHEREAS the duly elected governing authority of the City of Muskegon is the
Mayor and Commission thereof;
Now therefore be it resolved that the City of Muskegon adopts the attached Identity
Theft Prevention Program Policy, effective October 29, 2008.
This resolution passed.
Ayes__Carter, Gawron, Shepherd, Spataro, Warmington, Wierengo,
and Wisneski
Nays__None
CITY OF MUSKEGON
By Songs wn och As
Ant Marie Becker, MMC, City Clerk
CERTIFICATE
This resolution was adopted at a meeting of the City Commission, held on October 28, 2008. The
meeting was properly held and noticed pursuant to the Open meetings Act of the State of
Michigan, Act 267 of the Public Acts of 1976.
CITY OF MUSKEGON
By SAIN Daa Yet s
Ann Marie Becker, MMC, City Clerk
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