HomeMy WebLinkAboutRes 10-03 Adopting an Identity Theft Prevention Policy TOWN OF WESTLAKE
RESOLUTION NO. 10-03
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE,
TEXAS, ADOPTING AN IDENTITY THEFT PREVENTION POLICY IN
ACCORDANCE WITH THE FAIR AND ACCURATE CREDIT TRANSACTION ACT
OF 2003 AND STATE LAW REQUIREMENTS; PROVIDING A SEVERABILITY
CLAUSE AND DECLARING AN EFFECTIVE DATE.
WHEREAS, amendment to the Fair and Accurate Credit Transactions Act ("FACTA")
of 2003 required the development of an Identity Theft Prevention Program; and
WHEREAS, rules were scheduled to become effective in 2004 and required municipal
utilities and other departments to implement an identity theft program; and
WHEREAS, the Town of Westlake adopted a policy pursuant to the requirements of
FACTA approximately one year ago;
WHEREAS, the Town Council has undertaken a review of those requirements and has
considered certain recently enacted state law requirements concerning Identity Theft protections;
WHEREAS, after consideration of new state law requirements, and in order to update
the previous policy for ease of use and readability, the Town Council has determined that an
updated policy to be called"Identity Theft Prevention Program" should be adopted;
WHEREAS, this Resolution is being passed in full accordance with all requirements of
State law, including but not limited to the Open Meeting Act; and
WHEREAS, the Town Council determines that the passage of this Resolution is in the
best interest of the public.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF WESTLAKE:
SECTION 1. THAT all matters set forth herewith are found to be true and correct, are
incorporated herein by reference is if copied in their entirety, and are adopted by the Town.
SECTION 2. THAT the Town hereby adopts the Policy attached to this Resolution as
Exhibit "A" and incorporated by reference herein to be the Town's Identity Theft Protection
Policy.
SECTION 3. THAT it is hereby declared to be the intention of the Town, that sections,
paragraphs, clauses, and phrases of this Resolution are severable, and if any phrase, clause,
sentence or section of this Resolution shall be declared unconstitutional or illegal by the valid
judgment or decree of any court of competent jurisdiction, such unconstitutionality or illegality
shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this
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Town of Westlake
Identity Theft Prevention Policy
Effective beginning February 23, 2009
Revised February 22, 2010
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INTRODUCTION
The Town of'Westlake ("Town" or "Utility")is committed to keeping the information we
receive from citizens and customers safe from identity theft. This policy is designed to
protect people from identity theft and to address the requirements of state and federal
law. The methods used to prevent identity theft include ensuring that the information
given to open an account with the Town is valid to prevent someone from using another
person's identity to open an account, monitoring already existing accounts for unusual or
suspicious activity and, finally, providing for notification of account holders in the
unlikely event of unauthorized release of sensitive information.
PROGRAM PURPOSE
The purpose of this policy is to set out procedures and practices to assist Town personnel
in the prevention of identity theft and to comply with federal and state law requirements.
In addition, the Town will review recommended industry guidelines and follow those
guidelines that are applicable to Town operations and which would aid in the prevention
of identity theft.
Eliminating identity theft involves prevention, monitoring and notification. We will
prevent fraudulent accounts from being opened, we will monitor existing accounts for
suspicious activity and we will notify people if an unauthorized release occurs. Industry
standards to be studied include those promoted by the credit card industry, such as the
Payment Card Industry Data Security Standards (PCI DSS).
REQUIREMENTS
Federal Law. According to the Fair and Accurate Credit Transactions Act ("FACTA") a
municipal utility is a creditor subject to the requirements of the law. FACTA 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 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.
FACTA provides for certain "Red Flags" in its "Red Flag Rule" to assist in identifying
and preventing identity theft. 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:
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I. 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.
State Law. The Texas Local Government Code, section 205.010, provides that certain
requirements of the Business and Commerce Code apply to cities. Those requirements
generally concern notification in the event of an unauthorized breach of sensitive
personal information, and those standards are set out in the State Law section below.
Industry Standards. The Town is interested in any workable methods to assist in the goal
of preventing identity theft, and will also review industry standards to determine if such
standards are applicable to Town operations, and, if so, the standards should be utilized
by the Town. More discussion in regard to industry standards is set out in the Industry
Standards section below.
FEDERAL LAW
FACTA COMPLIANCE
1. FACTA - 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 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
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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.
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 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.
E. Alerts from Others
Red Flag
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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.
II. FACTA-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, Utility 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, 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.
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:
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.
III. FACTA-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:
Prevent and Mitigate
1. Continue to monitor an account for evidence of Identity Theft;
2. Contact the customer;
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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. Reopen an account with a new number;
7. Notify the Program. Administrator for determination of the appropriate step(s) to
take;
S. 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 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. 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.
IV. FACTA- PROGRAM UPDATES
The Program Administrator will periodically review and update this Program to
reflect changes in risks to customers and the soundness of the Utility from Identity Theft.
In doing so, the Program Administrator 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 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 Town Council with his or her recommended changes and the Town Council will
make a determination of whether to accept, modify or reject those changes to the
Program.
V. FACTA - PROGRAM ADMINISTRATION.
A. Oversieht
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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
Utility staff responsible for implementing the Program 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.
Staff will provide reports to the Program Administrator on incidents of Identity
Theft, the Utility's compliance with the Program and the effectiveness of the Program.
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 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 Program Administrator.
D. Non-disclosure of Specific Practiecs
For the effectiveness of this Identity Theft Prevention Program, knowledge about
specific Red Flag identification, detection, mitigation and prevention practices must be
limited to the Identity Theft Committee who developed this Program and to those
employees with a need to know them. Any documents that may have been produced or
arc produced in order to develop or implement this program that list or describe such
specific practices and the information those documents contain are considered
unavailable to the public because disclosure of them would be likely to substantially
jeopardized the security of information against improper use, that use being to
circumvent the Utility's Identity Theft prevention efforts in order to facilitate the
commission of Identity Theft.
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If a request is received for such information, Town staff will request an opinion
from the Texas Attorney General as to whether or not such information is public, citing
concerns in regard to identity theft and federal laws requiring prevention of identity theft.
STATE LAW
Notification of Breach of Security of Computerized Data
The Town will disclose any breach of system security, once such breach is discovered or
the Town is notified of a breach to any resident of the state whose sensitive personal
information was, or is reasonably believed to have been, acquired by an unauthorized
person. Such disclosure shall be made as quickly as possible and without unreasonable
delay, unless the Town is advised by law enforcement personnel to delay providing
notice because the notification will impede a criminal investigation. In such an instance,
notification will occur as soon as the law enforcement agency determines that such
notification will not compromise the investigation.
Notice shall be provided in writing. If the cost of providing notice is shown to exceed
$250,000 or the number of affected people to notify exceeds 500,000, or the Town does
not have sufficient contact information, the Town may give notice in such a case, by
electronic mail, conspicuous posting of the notice on the Town's website or notice
published in or broadcast on major statewide media.
If more than 10,000 people are affected by a breach of system security, the Town shall
also notify each consumer reporting agency that maintains files on consumers on a
nationwide basis of the timing, distribution and content of the notices.
INDUSTRY STANDARDS
Industry standards will be regularly reviewed to see if those standards are applicable to
Town operations and could be helpful in the Town's goal of prevention of identity theft.
In addition, certain credit card companies may require the adoption of such standards as a
requirement for acceptance of such credit cards for payment of Town accounts. One of
the best known set of standards is the Payment Card Industry Data Security Standards
(PCI DSS) and their standards will be reviewed and incorporated into Town practices as
appropriate.
Some of those industry standards, which may be updated or changed from time to time,
could include methods such as installing and maintaining a firewall, not using vendor
default passwords, protecting stored data, encrypting transmissions of credit card holder
data, using and updating anti-virus software, developing and maintaining secure systems
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and applications, restricting access to people who need to know, assigning unique
identification to all users, restricting physical access to credit or debit card data, tracking
and monitoring access to such data, regularly testing security systems and processes, and
maintaining and updating an information security policy.
DEFINITIONS
"Breach of System Security" means unauthorized acquisition of computerized data that
compromises the security, confidentiality, or integrity of sensitive personal information
maintained by a person, including data that is encrypted if the person accessing the data
has the key required to decrypt the data. Good faith acquisition of sensitive personal
information by an employee or agent of the person for the purpose of the person is not a
breach of system security unless the person uses or discloses the sensitive personal
information in an unauthorized manner.
"Covered Account" means:
1. Any account the Utility offers or maintains primarily for personal, family or
household purposes,that involves multiple payments or transactions; and
2. 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.
"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.
"Identity Theft" means "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."
"Red Flags" mean specific examples of activity or documents or other items that should
alert the suspicions of the Utility and could be used in carrying out identity theft.
"Sensitive Personal Information" means:
(1) An individual's first name or first initial and last name in combination
with any of the following items, if the names and the items are not
encrypted: (a) social security number; (b) driver's license number or
government-issued identification number; (c) account number or credit
or debit card number in combination with any required security code,
access code, or password that would permit access to an individual's
financial account; or
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(2) Information that identifies an individual and relates to: (a) the physical
or mental health or condition of the individual; (b) the provision of
health care to the individual; or (c)payment for the provision of health
care to the individual.
PROGRAM ADOPTION—LEGAL AUTHORITY
The Town 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 and Texas law, specifically Texas Business and Commerce Code section 521.053,
mad applicable to local governments by Texas Local Government Code section 205.010.
This Program was developed with oversight and approval of the Town Council. After
consideration of the size and complexity of the Town's operations and account systems,
and the nature and scope of the Town's activities, the Town Council determined that this
Program was appropriate for the Town, and therefore initially approved this Program on
February 23,2009, and updated the program on February 22, 2010.
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Resolution since the same would have been enacted by the Town without the incorporation in
this Resolution of any such unconstitutional or illegal phrase, clause, sentence, paragraph or
section.
SECTION 4. THAT this Resolution shall be in full force and effect from and after the
date of its passage.
PASSED AND APPROVED ON THIS 22°d DAY OF FEBRUARY 2010.
4,0F W
ATTEST: Laura Wheat, Mayor
r X
77
KeO Edw s, Town Secretary Thomas E. Brym r, To Manager
APPROVE S TO F
L. Stanton L own ttorney
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