2008 10-21 CCP - Laserfiche WebLink

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MEMORANDUM Date: October 21, 2008. To: City Council From: Jessie Hart, Treasurer Re: Adopt an Identity Theft Prevention Program Identity thieves use people's personally identifying information to open new accounts and misuse existing accounts, creating havoc for consumers and businesses. Financial institutions and creditors soon will be required to implement a program to detect, prevent, and mitigate instances of identity theft. The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the Red Flag Rules) requiring financial institutions and creditors to develop and implement written identify theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003..The programs must be in place by November 1, 2008, and must provide for the identification, detection, and response to patterns, practices or specific activities — knows and "red flags" -- that could indicate identity theft. What is the Red Flags Rule? • The federal FACT Act required the Federal Trade Commission to promulgate a rule to curb identity theft in the United States. Focused on banks, credit card companies and other related institutions that have a financial stake in their customers' financial transactions. y The Rule also applies to utilities as "creditors" with "covered accounts." - A..covered account.is an account used mostly for personal, family, or household purposes and that involves multiple payments or transactions. Covered accounts include credit card accounts,. mortgage.loans, automobile loans, margin accounts, cell phone accounts, utility. accounts, checking accounts, and savings :accounts. What is a Red Flag? A red flag is a "pattern, practice, or specific activity that indicates the possible existence of identity theft." 16 C.F.R. § 681.2(b) (9).