The Fair and Accurate Credit Transaction Act and the  Federal Trade Commission (FTC) require all private companies and public agencies who manage creditor accounts to establish procedures that help employees recognize potential identity theft.  The so-called "Red Flag" procedures must be adopted by June 1, 2010.  The City Council should adopt a policy statement that supports the City Administrator and staff in establishing procedures that comply with federal law and FTC rules.  Attached for Council consideration is a resolution that explains why the City must comply with the law and that directs the City Administrator to adopt procedures to implement the Red Flags Rule.  Also attached are the initial procedures for identifying and preventing identity theft during credit transactions with the City of Billings.

The City Council may approve, amend or disapprove the resolution.  Not adopting the resolution and procedures could expose the City to civil liability and FTC sanctions. 

The City will have to monitor the procedures' effectiveness, adapt them when needed and train employees.  Not adopting or following the procedures could expose the City to civil liability if a peson's identity is stolen and the City inadvertently participates in the fraud.

Staff recommends that the City Council approve the Resolution that adopts Reg Flags procedures.