Draft Fair and Accurate Credit Transaction Act of 2003 FACTA Red Flags Rules Policy 04-21-2009-4n

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ORANGE COUNTY BOARD O~ GOMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April ~ 1, 2449 Action Agenda Itenn No. ~' ~~ n SUBJECT: Fair and Accurate Credit Transactions Act of 2043 "FACTA" Red Fla s Rules DEPARTMENT: Duman Resources PUBLIC HEARING: YIN} ~ No ATTAC~HM ~-NT~S~: Draft Change County Identity Theft Prevention Program Policy INFORMATION CONTACT: Annette Moore, Staff Attorney 245-23 ~ ?' PtJRPt3SE: To consider adopting an Identity Theft Prevention Program Policy to comply with the federal Fair and Accurate Credit Transactions Act of 2443 ~"FACTA"} Red Flags Rules. BAGKGROUND: C)n~ November 9, ZOO?', the federal government published the "Red Flags Rule," pursuant to the Fair and Accurate Credit Transactions Act of 2443 ~"FACTA"}. Red Flags are atterns radices or s ecific activities indicatin the. ossible existence of identity theft. p ~p p g p Examples of red flags include: suspicious documents, suspicious persona[ identifying information, unusual .use o or suspicious activity related to an account and notices to customers of possible identity theft. The Red Flags Rule, while primarily targeted at financial institutions maintaining large amounts of sensitive consumer information, require both financial institutions and "other creditors" with covered accounts to develop and implement written "identity theft prevention programs." The Federal Trade C~on~mission has identified governments as creditors under the Red Flags Regulations. An Identity Theft Prevention Program provides methods to detect when accounts are fraudulent; procedures to prevent establishment of false accounts; procedures to ensure existing accounts are not being manipulated; and procedures to respond to identity theft. The Red Flags Rule became effective January 2448. However, compliance by covered entities such as local governments was expected in November 2445 but extended to May ~ , 2049. The Red Flags Rule applies to departments within Grange County that are"creditors" and have "covered accounts." A "creditor" is any entity which regularly extends, renews or continues credit or arranges for the extension, renewal or continuation of credit. Orange County Departments allowing clients to receive services and defer payments are "creditors" under the Rule. In order to develop an identity Theft Prevention Program the County was required to: • Assess the existing identity theft risk for new and existing accounts. ~ b C.F.R. ~ 681.2~b)~9}