Loading...
HomeMy WebLinkAbout09-107 Resolution No. 09-107 RESOLUTION ADOPTING AN IDENTITY THEFT PREVENTION PROGRAM IN ACCORDANCE WITH FEDERAL TRADE COMMISSION'S "RED FLAGS" RULE WHEREAS, the Fair and Accurate Credit Transactions Act of 2003, an amendment to the Fair Credit Reporting Act, requires rules regarding identity theft protection to be promulgated; and WHEREAS, those rules become effective November 1, 2008, and require municipalities with utility service functions and other departments to implement an identity theft program and policy on or before May 1, 2009; and WHEREAS, the City of Elgin has determined that the following identity theft protection program and policy is in the best interest of the city and its citizens. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF CITY OF ELGIN, ILLINOIS, that the following identity theft protection program and policy is hereby approved for the City of Elgin: CITY OF ELGIN IDENTITY THEFT PREVENTION PROGRAM AND POLICY SECTION 1: BACKGROUND The risk to the city, its employees and customers from data loss and identity theft is of significant concern to the city and can be reduced only through the combined efforts of every employee and contractor. SECTION 2: PURPOSE The city adopts this sensitive information policy to help protect employees, customers, contractors and the city from damages related to the loss or misuse of sensitive information. This policy will: 1. Define sensitive information; 2. Describe the physical security of data when it is printed on paper; 3. Describe the electronic security of data when stored and distributed; and 4. Place the city in compliance with state and federal law regarding identity theft protection. • This policy enables the city to protect existing customers, reducing risk from identity fraud, and minimize potential damage to the city from fraudulent new accounts. The program will help the city: 1. Identify risks that signify potentially fraudulent activity within new or existing covered accounts; 2. Detect risks when they occur in covered accounts; 3. Respond to risks to determine if fraudulent activity has occurred and act if fraud has been attempted or committed; and 4. Update the program periodically, including reviewing the accounts that are covered and the identified risks that are part of the program. SECTION 3: SCOPE This policy and protection program applies to employees, contractors, consultants, temporary workers, and other workers at the city, including all personnel affiliated with third parties. SECTION 4: POLICY 4.A: Sensitive Information Policy 4.A.1: Definition of"Sensitive Information" "Sensitive information" includes the following items whether stored in electronic or printed format: 4.A.1.a: Credit card information, including any of the following: 1. Credit card number(in part or whole) 2. Credit card expiration date 3. Cardholder name 4. Cardholder address 4.A.1.b: Tax identification numbers, including: 1. Social Security number 2. Business identification number 3. Employer identification numbers 2 4.A.1.c: Payroll information, including, among other information: 1. Paychecks 2. Pay stubs 4.A.1.d: Cafeteria plan check requests and associated paperwork 4.A.1.e: Medical information for any employee or customer, including but not limited to: 1. Doctor names and claims 2. Insurance claims 3. Prescriptions 4. Any related personal medical information 4.A.1.£ Other personal information belonging to any customer, employee or contractor, examples of which include: 1. Date of birth 2. Address 3. Phone numbers 4. Maiden name 5. Names 6. Customer number 4.A.1.g: This policy's definition of "sensitive information" should be read in conjunction with the exemptions from public disclosure enumerated in the Illinois Freedom of Information Act. If an employee is uncertain of the sensitivity of a particular piece of information, that employee should contact his or her supervisor and the corporation counsel for assistance in resolving the issue. 4.A.2: Hard Copy Distribution Each employee and contractor performing work for the city shall comply with the following policies: 3 1. File cabinets, desk drawers, overhead cabinets, and any other storage space containing documents with sensitive information will be locked when not in use. 2. Storage rooms containing documents with sensitive information and record retention areas will be locked at the end of each workday or when unsupervised. 3. Desks, workstations, work areas, printers and fax machines, and common shared work areas will be cleared of all documents containing sensitive information when not in use. 4. Whiteboards, dry-erase boards, writing tablets, etc. in common shared work areas will be erased, removed, or shredded when not in use. 5. When documents containing sensitive information are discarded they will be placed inside a locked shred bin or immediately shredded using a mechanical cross cut or U.S. Department of Defense-approved shredding device. Locked shred bins shall be labeled "Confidential Paper Shredding and Recycling." City records, however, may only be destroyed in accordance with the city's records retention policy, and in accordance with the Illinois Local Records Act. 4.A.3: Electronic Distribution Each employee and contractor performing work for the city shall comply with the following policies: 1. Internally, sensitive information may be transmitted using approved city e-mail computer software programs and networks. All sensitive information shall be encrypted when stored in an electronic format. 2. Any sensitive information sent externally via email shall be encrypted and password-protected, and transmitted solely to approved recipients. Additionally, a statement substantially similar to the following shall be included in any e-mail transmission containing sensitive information: "This message may contain confidential and/or proprietary information and is intended for the person/entity to whom it was originally addressed. Any use by others is strictly prohibited." SECTION 5: ADDITIONAL IDENTITY THEFT PREVENTION PROGRAM REQUIREMENTS When the city maintains certain covered accounts pursuant to federal legislation, the city may include the additional program details required under such federal accounts. 4 5.A: Covered Accounts A covered account includes any account that involves or is designed to permit multiple payments or transactions. Every new and existing customer account that meets the following criteria is covered by this program: 1. Business, personal and household accounts for which there is a reasonably foreseeable risk of identity theft; or 2. Business, personal and household accounts for which there is a reasonably foreseeable risk to the safety or soundness of the city from identity theft, including financial, operational, compliance, reputation, or litigation risks. 5.B: Red Flags 5.B.1: The following red flags are potential indicators of fraud. Any time a red flag, or a situation closely resembling a red flag, is apparent, it should be investigated for verification. 1. Alerts, notifications or warnings from a consumer reporting agency; 2. A fraud or active duty alert included with a consumer report; 3. A notice of credit freeze from a consumer reporting agency in response to a request for a consumer report; or 4. A notice of address discrepancy from a consumer reporting agency as defined in § 334.82(b) of the Fairness and Accuracy in Credit Transactions Act. 5.B.2: Red flags also include consumer reports that indicate a pattern of activity inconsistent with the history and usual pattern of activity of an applicant or customer, such as: 1. A recent and significant increase in the volume of inquiries; 2. An unusual number of recently established credit relationships; 3. A material change in the use of credit, especially with respect to recently established credit relationships; or 4. An account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor. 5.C: Suspicious Documents 5.C.1: Documents provided for identification that appear to have been altered or forged. 5 5.C.2: The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identification. 5.C.3: Other information on the identification is not consistent with information provided by the person opening a new covered account or customer presenting the identification. 5.C.4: Other information on the identification is not consistent with readily accessible information that is on file with the city, such as a signature card or a recent check. 5.C.5: An application appears to have been altered or forged, or gives the appearance of having been destroyed and reassembled. 5.D: Suspicious Personal Identifying Information 5.D.1: Personal identifying information provided is inconsistent when compared against external information sources used by the city. For example: 1. The address does not match any address in the consumer report; 2. The social security number (SSN) has not been issued or is listed on the Social Security Administration's death master file; or 3. Personal identifying information provided by the customer is not consistent with other personal identifying information provided by the customer. For example, there is a lack of correlation between the SSN range and date of birth. 5.D.2: Personal identifying information provided is associated with known fraudulent activity as indicated by internal or third-party sources used by the city. For example, the address on an application is the same as the address provided on a fraudulent application. 5.D.3: Personal identifying information provided is of a type commonly associated with fraudulent activity as indicated by internal or third-party sources used by the city. For example: 1. The address on an application is fictitious, a mail drop, or a prison; or 2. The phone number is invalid or is associated with a pager or answering service. 5.D.4: The SSN provided is the same as that submitted by other persons opening an account or other customers. 6 5.D.5: The address or telephone number provided is the same as or similar to the address or telephone number submitted by an unusually large number of other customers or other persons opening accounts. 5.D.6: The customer or the person opening the covered account fails to provide all required personal identifying information on an application or in response to notification that the application is incomplete. 5.D.7: Personal identifying information provided is not consistent with personal identifying information that is on file with the city. 5.D.8: When using security questions (mother's maiden name, pet's name, etc.), the person opening the covered account or the customer cannot provide authenticating information beyond that which generally would be available from a wallet or consumer report. 5.E: Unusual Use Of, or Suspicious Activity Related To, the Covered Account 5.E.1: Shortly following the notice of a change of address for a covered account, the city receives a request for new, additional, or replacement goods or services, or for the addition of authorized users on the account. 5.E.2: A new revolving credit account is used in a manner commonly associated with known patterns of fraud patterns. For example, the customer fails to make the first payment or makes an initial payment but no subsequent payments. 5.E.3: A covered account is used in a manner that is not consistent with established patterns of activity on the account. There is, for example: 1. Nonpayment when there is no history of late or missed payments; 2. A material change in purchasing or usage patterns. 5.E.4: A covered account that has been inactive for a reasonably lengthy period of time is used (taking into consideration the type of account, the expected pattern of usage and other relevant factors). 5.E.5: Mail sent to the customer is returned repeatedly as undeliverable although transactions continue to be conducted in connection with the customer's covered account. 5.E.6: The city is notified that the customer is not receiving paper account statements. 5.E.7: The city is notified of unauthorized charges or transactions in connection with a customer's covered account. 7 • 5.E.8: The city receives notice from customers, victims of identity theft, law enforcement authorities, or other persons regarding possible identity theft in connection with covered accounts held by the city 5.E.9: The city is notified by a customer, a victim of identity theft, a law enforcement authority, or any other person that it has opened a fraudulent account for a person engaged in identity theft. SECTION 6: RESPONDING TO RED FLAGS 6.A: Detection of Potential Fraudulent Activity Once potentially fraudulent activity is detected, an employee must act quickly as a rapid appropriate response can protect customers and the city from damages and loss. 6.A.1: Once potentially fraudulent activity is detected, gather all related documentation and write a description of the situation. Present this information to the designated authority for determination. 6.A.2: The designated authority will complete additional authentication to determine whether the attempted transaction was fraudulent or authentic. 6.B: Detection of Fraudulent Transaction If a transaction is determined to be fraudulent, appropriate actions must be taken immediately. Actions may include: 1. Canceling the transaction; 2. Notifying and cooperating with appropriate law enforcement; 3. Determining the extent of liability of the city; and 4. Notifying the actual customer that fraud has been attempted. SECTION 7: PERIODIC UPDATES TO PLAN 7.A: Re-Evaluation of Program and Policy at Scheduled Intervals At periodic intervals established in the program, or as required, the program will be re- evaluated to determine whether all aspects of the program are up to date and applicable in the current business environment. 7.B: Review of Covered Accounts Periodic reviews will include an assessment of which accounts are covered by the program. 8 • 7.C: Review of Red Flags As part of the review, red flags may be revised, replaced or eliminated. Defining new red flags may also be appropriate. 7.D: Review of Fraudulent Activity Action Actions to take in the event that fraudulent activity is discovered may also require revision to reduce damage to the city and its customers. SECTION 8: PROGRAM ADMINISTRATION 8.A: Involvement of Management 1. This Identity Theft Prevention Program and Policy shall not be operated as an extension to existing fraud prevention programs, and its importance warrants the highest level of attention. 2. This Identity Theft Prevention Program and Policy is the responsibility of the governing body. Approval of the initial plan has been appropriately documented and maintained. 3. Operational responsibility of this Identity Theft Prevention Program and Policy is delegated to the fiscal services group director. 8.B: Staff Training 1. Staff training shall be conducted for all employees, officials and contractors for whom it is reasonably foreseeable that they may come into contact with accounts or personally identifiable information that may constitute a risk to the city or its customers. 2. The fiscal services group director shall be responsible for ensuring identity theft training for all requisite employees and contractors. 3. Applicable employees shall receive annual training in all elements of this policy. 4. To ensure maximum effectiveness, applicable employees may continue to receive additional training as changes to the program are made. 8.C: Oversight of Service Provider Arrangements 1. It is the responsibility of the city to ensure that the activities of all service providers are conducted in accordance with reasonable policies and procedures designed to detect, prevent, and mitigate the risk of identity theft. 2. A service provider that maintains its own identity theft prevention program, consistent with the guidance of the red flag rules and validated by appropriate due diligence, may be considered to be meeting these requirements. 9 3. Any specific requirements should be specifically addressed in the appropriate contract arrangements. s/Ed Schock Ed Schock, Mayor Presented: April 29, 2009 Adopted: April 29, 2009 Vote: Yeas: 7 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk 10 � OF AC0, • 0 /0 c. y 0, ti Memorandum S City of Elgin o? � -. RATEDIN-- DATE: April 23, 2009 TO: Mayor and Members of the City Council Olufemi Folarin, City Manager FROM: William A. Cogley, Corporation Counsel SUBJECT: Resolution Adopting Identity Theft Prevention Program and Policy in Accordance with Federal Trade Commission's "Red Flags" Rule The U.S Congress passed the Fair and Accurate Credit Transactions Act of 2003 (FACTA) in response to the growing threat of identity theft. FACTA requires the Federal Trade Commission (FTC) to promulgate rules regarding identity theft, and in November 2008, the FTC issued what is commonly referred to as the "Red Flag" rules. These rules require certain municipal departments—generally departments charged with utility billing—to enact policies and procedures by May 1, 2009. Every affected municipality must develop and implement a written "Identity Theft Prevention Program and Policy" that is designed to detect, prevent and mitigate identity theft in connection with the opening of a covered account or any existing covered account. The program must be appropriate to the size and complexity of the municipality and the nature and scope of its activities. The attached resolution adopts such a program and policy by the city in accordance with the federal mandate. The draft Identity Theft Prevention Program set forth in the resolution is based in part upon a model program obtained through links from the Illinois Municipal League website. In accordance with federal law, the city's Identity Theft Prevention Program and Policy includes provisions to: • Identify relevant red flags for covered accounts signaling possible identity theft 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 • Ensure the program is updated periodically to reflect changes in risks. Mayor and Members of the City Council Olufemi Folarin April 23, 2009 Page 2 The policy also provides for the continued administration and oversight of the program, including: • Obtaining approval of the initial written program by the city council; • Involving a designated management-level employee in the development—here, the fiscal services group director—in the implementation, administration and oversight of the program; • Staff training as necessary to effectively implement the program; and • Exercise of appropriate and effective oversight of service provider arrangements. Federal law requires the city council's adoption of the resolution establishing an "Identity Theft Prevention Program and Policy" in accordance with Federal Trade Commission's "Red Flags" rule. V WAC Attachment cc: Sean R. Stegall (w/attachment) James R. Nowicki (w/attachment) Colleen Lavery (w/attachment)