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• <br /> GUIDANCE FOR COMPLYING WITH THE RED FLAGS RULE <br /> Adoption of an Identity Theft Prevention Program <br /> Your Identity Theft Prevention Program must be approved by either your governing <br /> commission or council OR BY A DESIGNATED EMPLOYEE AT A SENIOR LEVEL OF <br /> MANAGEMENT by November 1, 2008. The Federal Trade Commission will not be <br /> checking individual utilities to see if this deadline is met,however, so failure to meet it <br /> should not be considered urgent. Having a well thought-out program in place in the near <br /> future is preferred to incorporating a pro-forma plan"for the books." <br /> Customizing a template for your utility <br /> • The template provided by MMUA should be modified as necessary to fit your utility. <br /> You may also find useful information in the document"Identity Theft and Municipal <br /> Utilities"provided by MMUA through its website. <br /> The Red Flags Rule is meant to prevent"Identity Theft" as the Rule defines it—fraud <br /> using another person's identifying information. While the theft of customer identification <br /> information may lead to "Identity Theft," information theft itself is not the focus of the <br /> Rule. Also keep in mind that the Federal Trade Commission created this rule particularly <br /> with banks, credit card providers and large private utilities in mind. While significant, <br /> the types of fraud encountered at utilities,particularly smaller utilities, are more limited <br /> in nature. (See MMUA's "Identity Theft and Municipal Utilities.") <br /> Note that some smaller utilities may not find it necessary to use certain Identity Theft <br /> prevention techniques included in the template, such as requiring photo ID for new <br /> accounts. While the Red Flags categories and Red Flags themselves in the template are <br /> examples taken nearly directly from FTC-provided information, your utility must <br /> determine the specific items to include, exclude or expand upon within each section. For <br /> instance, if you do not check credit reports, the first category under"Identification of Red <br /> Flags" may be eliminated altogether. <br /> Your utility may find it useful to expand certain sections of the template. For example, <br /> the"Prevent and Mitigate Identity Theft"section may be drafted to show a range of <br /> • possible responses to Red Flag detections and identify one or more persons who will be <br /> responsible within your utility for determining what response is appropriate depending <br /> Page 2 of 3 <br />