Officials look to curtail identity theft

CITY HALL — The City Council is expected today to approve an Identity Theft Prevention Program that would tighten oversight rules as the city faces an increase in stolen information.

The program marks a preemptive step by the city to maintain compliance with a new federal regulation — the Red Flags Rule — which requires companies to develop a program to detect, prevent and minimize the damage that could result from identity theft.

The Federal Trade Commission, the nation’s consumer protection agency, will begin to enforce the rule Friday.

“It will help the people who do business with us have some reasonable assurance that [Glendale] is taking steps to protect information,” said City Manager Jim Starbird, who will be responsible for the general administration and oversight of the program. “That’s what we’re doing with this program.”

The program applies to all city employees, contractors, consultants, temporary workers and anyone else who has access to anyone’s personal information.

Nationwide, cities that maintain covered accounts — ones that involve multiple payments or transactions involving deferred payment, including utility accounts, first-time home buyer loans and home rehabilitation loans — are required to enact identity theft prevention programs.

The problem of identity theft is growing nationwide, according to the FTC. As many as 9 million Americans have their identifying information stolen every year.

That growth is particularly acute in Glendale, where Police Department records show a 39% rise in identity theft reports in 2008 over 2007, with 562 reported instances. The first two months of 2009 continue the rising trend, with 129 reported instances of identity theft, a 40% rise from the same period a year ago.

To help consumers fight this growing trend, the Fair and Accurate Credit Transaction Act of 2003 set standards for guarding customer information. The FTC used the act as a guideline in 2007 when it created the Red Flag Rules, although the rules will only go into effect this year.

The so-called red flags are warning signs, including patterns, practices or specific activities that suggest identity theft.

Glendale’s program defines five categories of red flags, which are: alerts, notifications or warnings from a consumer reporting agency; suspicious documents; suspicious personal identification information; unusual or suspicious activity relating to a covered account; and notices from consumers, victims of identity theft, law enforcement or business regarding possible identity theft.

Detection procedures include identity verification, customer authentication, address change verification and monitoring transactions. Costs associated with the program are expected to be nominal.

The program’s general policy calls for employees to “use common sense judgment in securing confidential information,” and employees who have access to identifying information receive two hours of initial training and 30 minutes’ refresher training annually.

City departments will also be required to periodically review and annually report on the program’s effectiveness, including reporting any incidents and measures adopted to prevent recurrences.

Starting Friday, changes in tracking procedures will likely increase red flags at Glendale Water & Power, according to Customer Services Administrator Tami Vallier. Glendale Water & Power has already been practicing the bulk of the rules to mitigate identity theft for more than a decade, Vallier said.

“It’s not frequent because we have so many of these measures in place,” she said. “It’s basically industry practice.”

In October, Glendale Water & Power formalized its practices to comply with the act when the city adopted the utility’s Identity Theft Prevention Program.

Glendale Water & Power is moving forward with a contract for a knowledge-based authentication program through Experian that will enable a second check validation for consumers who may have credit freezes or fraud alerts. The cost of the program is less than $5,000 a year, Vallier said.

Glendale Water & Power’s work was integral to the development of the city’s own identity theft program, said Gillian van Muyden, the city’s redevelopment general counsel. Van Muyden was in charge of preparing the resolution and the program for City Council approval.

“We are ready and willing and able and desire to implement whatever procedures are needed,” she said.