Res 09-545
RESOLUTION NO. 09-545
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
FEDERAL WAY, WASHINGTON, ADOPTING AN IDENTITY
THEFT PREVENTION PROGRAM PURSUANT TO THE FAIR
AND ACCURATE CREDIT TRANSACTION ACT OF 2003.
WHEREAS, the municipal utilities of the City of Federal Way may be considered
"creditors" under the Fair and Accurate Credit Transaction Act of 2003 (Act); and
WHEREAS, the municipal utilities of the City of Federal Way may extend credit as
defined in the Act by deferring payment for services rendered; and
WHEREAS, the municipal utilities of the City of may maintain "covered accounts" as
defined in the Act; and
WHEREAS, the City of desires to adopt a policy establishing an Identity Theft
Prevention Program pursuant to the Act;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
RESOLVES AS FOLLOWS:
Section 1. Adoption of the Identity Theft Prevention Program. The City of Federal Way's
procedures for identifying, detecting, and responding to identity theft, attached hereto as
Attachment A and adopted by this reference as if set forth in full, are hereby adopted for use by
the City of Federal Way's municipal utilities to the full extent consistent with state law.
Section 2. Severability. If any section, sentence, clause or phrase of this resolution
should be held to be invalid or unconstitutional by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of any other
section, sentence, clause or phrase of this resolution.
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Section 3. Corrections. The City Clerk and the codifiers ofthis resolution are authorized to
make necessary corrections to this resolution including, but not limited to, the correction of
scrivener/clerical errors, references, resolution numbering, section/subsection numbers and any
references thereto.
Section 4. Ratification. Any act consistent with the authority and prior to the effective date
of this resolution is hereby ratified and affirmed.
Section 5. Effective Date. This resolution shall be effective immediately upon passage by
the Federal Way City Council.
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON this 5th day of May, 2009.
CITY OF FEDERAL WAY
M
ATTEST:
~&f I'VlffJ.JJ J1#m
CITY CLERK, CAR L MC L Y, CMC
APPROVED AS TO FORM:
fJ~~
CITY ATTORNEY, PATRICIA A. RICHARDSON
FILED WITH THE CITY CLERK: 04-28-2009
PASSED BY THE CITY COUNCIL: 05-05-2009
RESOLUTION NO.: 09-545
Resolution No. 09-545
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Attachment A
To Resolution No. 09-545
City of Federal Way
Identity Theft Prevention Program
I. PROGRAM ADOPTION
The Surface Water Utility ("Utility") developed this Identity Theft Prevention Program
("Program") pursuant to the Federal Trade Commission's Red Flag Rule ("Rule"), which
implements Section I 14 ofthe Fair and Accurate Credit Transactions Act of2003. 16 C. F. R. $
681.2. This Program was developed and approved by the City Council. After consideration of the
size and complexity of the Utility's operations and account systems, and the nature and scope of
the Utility's activities, the City Council determined that this Program was appropriate for the
Surface Water Utility, and therefore adopted this Program on May 1 st 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 the size, complexity and 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.
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B. Red Flags Rule definitions used in this Program
The Red Flag 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 which defers payments may be 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."
Utility accounts that are individual utility service accounts held by customers of the utility
whether residential, commercial or industrial may be covered by the Rule. Under the Rule, a
"covered account" is:
I. Any account the Utility offers or maintains primarily for personal, family or household
purposes, that involves multiple payments or transactions that may be considered deferred; and
2. Any other account the Utility offers or maintains for which the Utility identifies a
reasonably foreseeable risk to customers or to the safety and soundness of the Utility 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 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. To the extent covered by the
Act, the Utility identifies the following Red Flags and will train appropriate staff to recognize
these Red Flags as appropriate and as they are encountered in the ordinary course of Utility
business:
A. Alerts, Notifications and Warnings From Credit Reporting Agencies
Red Flags
I. Report of fraud accompanying a credit report;
2. Notice or report from a credit agency of a credit freeze on a customer or applicant;
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3. Notice or report from a credit agency of an active duty alert for an applicant;
4. Notice or report from a credit agency of an address discrepancy; and
5. Indication from a credit report of activity that is inconsistent with a customer's usual
pattern or activity, such as an unusual increase in the volume of credit inquiries, unusual increase
in the number of established credit relationships, or a material change in the use of credit.
B. Suspicious Documents
Red Flags
I. 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 information on identification document is not consistent with information
provided by the person opening a new covered account, by the customer presenting the
identification, or with existing customer information on file with the creditor (such as a
signature card or recent check); and
4. Application for service that appears to have been altered or forged.
C. Suspicious Personal Identifying Information
Red Flags
I. Identifying information presented that is inconsistent with other information the
customer provides, for instance, where there is a lack of correlation between the social security
number range and the date of birth;
2. Identifying information presented that is inconsistent with external sources of
information, for instance, an address does not match a consumer report or a social security
number is listed in the Social Security Administration's Death Master File;
3. Identifying information presented is associated with common types of fraudulent
activity, such as use of a fictitious billing address or phone number;
4. Identifying information presented that is consistent with known fraudulent activity,
such as presentation of an invalid phone number or fictitious billing address used in previous
fraudulent activity;
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.
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D. Suspicious Account Activity or Unusual Use of Account
Red Flags
I. 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 {o-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
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.
IV. PREVENTING AND MITIGATING IDENTITY THEFT
In the event Utility personnel detect any identified Red Flags, such personnel must
contact the Finance Director of the City or contracting agent. The Finance Director will then
decide which of the following steps should be taken:
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;
6. Reopen an account with a new number;
7. Notify law enforcement; or
8. Determine that no response is warranted under the particular circumstances.
V. PROGRAM UPDATES
The Director of Public Works shall serve as Program Administrator. 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
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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. Ifwarranted, the Program Administrator will update the Program or
present the City Council with his or her recommended changes and the City Council will make a
determination of whether to accept, modify or reject those changes to the Program.
VII. PROGRAM ADMINISTRATION.
A. Oversight
Responsibility for developing, implementing and updating this Program lies with the
Program Administrator in accordance with the Act. The Program Administrator will be
responsible in accordance with the Act for the Program's administration, for ensuring appropriate
training of Utility staff, for reviewing any staff reports regarding the detection of Red Flags and
the steps for preventing and mitigating Identity Theft, for determining which steps of prevention
and mitigation should be taken in particular circumstances, and for considering periodic changes
to the Program.
B. Staff Training
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.
C. Service Provider Arrangements
Where 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 ofIdentity Theft.
I. Provide a mechanism, through a contract or interlocal agreement, that service providers
coordinate with the City to have consistent policies and procedures in place; and
2. Provide a mechanism, by contract or interlocal agreement, that service providers
review the Utility's Program and take appropriate actions.
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