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FILE ID• O
Date: 07/22/2009 Requesting Department: Finance
Commission Meeting Date: 09/10/2009 District Impacted: N/A
Type: ® Resolution ❑ Ordinance ❑ Emergency Ordinance ❑ Discussion Item
❑ Other
Subject: Identity Theft Prevention Program
Purpose of Item:
REA
Law Department
Matter ID No.
09-1542
The Federal Trade Commission has issued regulations requiring financial institutions and creditors to develop
and implement written identity theft prevention programs under the Fair and Accurate Credit Transaction Act of
2003 (FACTA). Municipal utilities are subject to these requirements and the governing bodies of cities must
adopt programs that meet the requirements of FACTA (all cities that operate utilities must adopt programs that
meet the requirements of FACTA). These identity theft prevention programs must provide for the identification,
detection, and response to patterns, practices, or specific activities - known as "red flags" - that could indicate
identity theft. A program that complies with FACTA requirements may be tailored to the specific needs of each
city, depending upon the way that city stores and collects a customer's information. The protocol may be
adopted via resolution of the governing body.
Background Information:
At Congress' direction, five federal agencies jointly issued rules, including the Red Flag Rule, to implement the
Fair and Accurate Credit Transactions Act (FACTA). The purpose of the Act: to curb identity theft. The
mandate: creditors must adopt and carry out an Identity Theft Prevention Program (ITPP) that contains each of
the basic elements specified in the Red Flag Rule. Red Flag is a "pattern, practice, or specific activity that
indicates the possible existence of identity theft". Identity Theft is a fraud committed or attempted using the
identifying information of another person without authority. [16 CFR 603.2(a)]. Identifying Information is any
name, number or biometric data that may be used, alone or in conjunction with any other information, to identify
a specific person. The creation of a fictitious identity using any single piece of information belonging to a real
person falls within the definition of "identity theft" because such a fraud involves "using the identifying
information of another person without authority." [72 Fed.Reg. 63723]. Several of municipalities operations
make municipalities creditors. All creditors must comply with the Red Flag Rule. The Federal Trade
Commission (FTC) is the regulatory agency to which they are accountable.
Budget Impact Analysis
NO Is this item related to revenue?
NO Is this item an expenditure? If so, please identify funding source below.
General Account No:
Special Revenue Account No:
CIP Project No:
NO Is this item funded by Homeland Defense/Neighborhood Improvement Bonds?
Start Up Capital Cost:
Maintenance Cost:
Total Fiscal Impact:
CIP
If using or receiving capital funds
Grants
Final Approvals
(SIGN AND DATE)
Budget
Risk
Purchasin Dept.
Chief City I