20-476ORDINANCE NO. 2 O-4 7(
AN ORDINANCE OF TI� CITIT OF DENTON AMENDING CHAPTER 26 OF THE CODE
OF ORDINANCES TO ADD SECTIONS 26-14 THROUGH 26-22 ESTABLISHING AN
IDENTITY T`HEFT PREVENTION PROGRAM; AND PROVIDING A SEVERABILITY
CLAUSE AND AN EFFECTIVE DATE.
WHEREAS, the Federal Trade Commission's Red Flags Rule, which implements Section
114 of the Fair and Accurate Credit Transactions Act of 2003, requires that every creditor is
required to establish an "Identify Theft Prevention Program" tailored to its size, complexity and
the natures of its operation; and
WHEREAS, said Identity Theft Prevention Program should contain reasonable policies to
identify, detect, and respond to "red flags" and to ensure periodic updates to such program; and
WHEREAS, it is in the interest of the public welfare to implement this Identity Theft
Prevention Program; NOW, THEREFORE,
THE COUNCII, OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated into the body of this Ordinance as if fully set forth herein.
SECTION 2. Chapter 26 of the Code of Ordinances of the City of Denton is hereby
amended as set forth in "E�ibit A," which is attached and fully incorporated herein by reference.
SECTION 3. If any provision of this ordinance or the application thereof to any person or
circumstance is held invalid by any court, such invalidity shall not af�ect the validity of the
provisions or applications, and to this end the provisions of this ordinance are severable.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
The motion to approve this ordinance was made by �Hi✓ �/�lN
and seconded by �%E�SE �1�V/S , the ordinance was passed and
approved by the following vote [ 7-�:
Chris VVatts, Mayor:
Gerard Hudspeth, District 1:
Keely G. Briggs, District 2:
Jesse Davis, District 3:
Jolu1 Ryan, District 4:
Deb Armintor, At Large Place 5:
Paul Meltzer, At Large Place 6:
✓
✓
J
Abstain Absent
PASSED AND APPROVED this the �%� day of __ C�� 2020.
ATTEST:
ROSA RIOS, CITY SECRETARY
B�:
APPROVED AS TO LEGAL FORM:
AARON LE , CITY ATTORNEY
BY:
CHRIS WATTS, MAYOR
Page 2 of 2
Sec. 26-14. — Identity Theft Prevention
The purpose of this policy is to prevent Identity Theft through the identification of
"Red Flags." This program sets forth policies and authorizes the creation of written
directives to:
(a) Identify Relevant Red Flags
(b) Detect Red Flags
(c) Act to prevent and mitigate Identity Theft
(d) Foster Program maintenance and continuing staff training
Knowledge of specific administrative procedures, administrative directives, and
internal practices employed to ensure customer ldentity Theft protection shall be limited
to Customer Service personnel who require them for the purpose of preventing Identity
Theft and for maintenance of the Program. �
Sec. 26-15. — Identity Theft Prevention Measures Definition of Terms.
For the purposes of this policy, the following terms shall be defined as follows:
City means the City of Denton, Texas.
Covered Account means: Under the Rule, a"covered account" is:
(1) Any account Customer Service offers or maintains primarily for personal,
family or household purposes, that involves multiple payments or
transactions; and
(2) Any other account Customer Service offers or maintains for which there is a
reasonably foreseeable risk to customers or to the safety and soundness of
the City from Identity Theft.
Creditors means "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."
Customer Service means the department responsible for creation and
maintenance of billed customer accounts.
Identifying /nformation means "any name or number that may be used, alone or
in canjunction 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.
Program means the Identity Theft Prevention Program for the City.
Program Administrator means the Customer Service Manager or designee
responsible for the Program.
Red Flag means a pattern, practice, or specific activity that indicates the possible
existence of Identity Theft
Sec. 26-16. — Identification of Red Flags
Customer Service 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. Customer Service identifies
the following red flags in each of the listed categories:
(a) Notifications and Warnings from Consumer Reporting Agencies
(1 } Report of fraud accompanying a consumer credit report;
(2) Natice or report from a consumer credit agency of a credit freeze on a customer
or applicant;
(3) Notice ar report from a consumer credit agency of an active duty alert for an
applicant; and
(4) Indication from a consumer credit report of activity that is inconsistent with a
customer's usual pattern or activity
(b) Suspicious Documents
(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
(1) Identifying information presented that is inconsistent with other information the
customer provides (example: inconsistent birth dates, lack of correlation between
Social Security number range and date of birth);
(2) Identifying information presented that is inconsistent with other sources of
information (for instance, Social Security number or 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 infarmation 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 sacial security numbers
must not be required) or an applicant cannot provide information requested
beyond what could commonly be found in a purse or wallet; 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
(1) Change of address for an account followed by a request to change the account
holder's name;
(2) Payments stop on an atherwise 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 Customer Service that a customer is not receiving mail sent by
Customer Service;
(6) Notice to Customer Service that an account has unauthorized activity;
(7) Breach in Customer Service's computer system security; and
(8) Unauthorized access to or use of customer account information.
{e) Alerts from Others
(1) Notice to Customer Service from a customer, identity theft victim, fraud detection
service, law enforcement or other person that it has opened or is maintaining a
fraudulent account for a person engaged in Identity Theft.
Sec. 26-17. — Red Flag Detection
Customer Service shall monitor accounts for detection of Red Flags under the
requirements set forth in section 26-17 as they apply ta new and existing customer
accounts.
(a) In order to detect Red Flags associated with the opening of a new customer
account, Customer Service personnel will take the following steps to obtain and
verify the identity of the person opening the account:
(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;
(4} Request additional documentation to establish identity; and
{5) Independently contact the customer or business.
(b) In order to detect Red Flags for an existing customer account, Customer Service
personnel will take the following steps to monitor transactions with an account:
(1) Verify the identification of customers if they request information (in person, via
tetephone, via facsimile, via email);
{2) Verify the validity of requests to close accounts or change billing addresses; and
{3) Verify changes in banking information given for billing and payment purposes.
Sec. 26-18. — Identity Theft Prevention and Mitigation Measures
In the event Customer Service personnel detect any identified Red Flags, such
personnel shall take one or more of the following steps to prevent and mitigate identify
theft, depending on the degree of risk posed by the Red Flag.
(1) Continue to monitor an account for evidence of Identity Theft;
(2) Contact the customer, sometimes through multiple methods;
(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) Do not close the account, but monitor or contact authorities;
(7) Reopen an account with a new number;
(8) Notify the Program Administrator for determination of the appropriate step(s) to
take;
(9) Notify law enforcement; or
(10) Determine that no response is warranted under the particular circumstances.
Sec. 26-19. — Protection of Customer ldentifying Information
In order to further prevent the likelihood of identity theft occurring with respect to
utility accounts, Customer Service will take the following steps with respect to its internal
operating procedures to protect customer identifying information:
(a) Ensure that its website is secure or provide clear notice that the website is not
secure;
(b) Where and when allowed, ensure complete and secure destruction of paper
documents and computer files containing customer information;
(c} Ensure that office computers are password protected and that computer screens
lock after a set period of time;
(d) Change passwords on office computers on a regular �asis;
(e) Ensure all computers are backed up properly and any backup information is
secured;
(f) Keep offices clear of papers containing customer information;
(g) Request only the last 4 digits af social security numbers (if any);
(h) Ensure computer virus protection is up to date; and
(i} Require and keep only the kinds of customer information that are necessary for
business purposes.
Sec. 26-2Q. — Program Maintenance and Administration
Responsibility for developing, implementing and updating this Program lies with
the Program Administrator. 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 shauld be taken in particular circumstances and considering periodic changes
to the Program. The Program Administrator may issue written directives in furtherance
of this policy with the approval of the City Manager.
The Program will be periodically reviewed and updated to reflect changes in risks
to customers and the soundness of Customer Service from Identity Theft. At least
annually, the Program Administrator will take any of the following steps:
(a) Consider Customer Service's experiences with Identity Theft situations;
(b) Consider changes in Identity Theft methods, detection and prevention methods;
(c) Review changes in types of accounts Customer Service maintains and changes in
Customer Service's business arrangements with other entities as they appfy to the
Program;
(d) Consult with law enforcement authorities;
(e) Consult with other City personnel, and
(f) Make determination whether changes to the Program, including the lising of Red
Flags, are warranted;
(g) Present any recommended Program changes for formal adoption.
Sec. 26-21. — Program Training
All Customer Service staff shall be trained either by or under the direction of the
Program Administrator. Training shall occur at the time of employment and not less than
annually thereafter in the following areas:
{a) Detection of Red Flags;
(b) Responsive steps to be taken when a Red Flag is detected.
Sec. 26-22. — Application to Service Providers
In the event Customer Service engages a service provider to perform an activity
in connection with one or more accounts, including but not limited to franchise utility
providers, Customer Service 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:
(a) Require, by contract or contract amendment, that service providers have such
policies and procedures in place; and
(b) Require, by contract or cantract amendment, that service providers review Customer
Service's Program and report any Red Flags to the Program Administrator.