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Red Flag Program

General

Identity theft, a fraud committed or attempted using the identifying information of another person without authority, is a growing problem within the United States and abroad.  According to the Federal Trade Commission (FTC), 9 million Americans have their identities stolen each year.  In response to this problem the FTC, in conjunction with other government entities, has established "Red Flag" rules from the Fair and Accurate Credit Transactions Act (FACTA) of 2003.  These rules require financial institutions and creditors that offer or maintain one of more covered accounts to develop and implement a written program that is designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account.  Financial institutions and creditors are required to implement a Red Flag program by May 1, 2009.  As a "creditor" and in response to the risk posed to its students and staff, Willamette University adopts the following program.  The University has taken into consideration the size and complexity of its operations and the nature and scope of its activities in crafting this program.

Definitions

Red Flag:  A pattern, practice, or specific activity that indicates the possible existence of identity theft.

Identity Theft:  A fraud committed or attempted using the identifying information of another person without authority.

Identifying Information:  The FTC defines this term as "any name or number that may be used, alone or in conjunction with any other information, to identify a specific person, including":

• Name
• Social security number
• Date of birth
• State or government issued driver's license or identification number
• Alien registration number
• Government passport number
• Employer or taxpayer identification number
• Unique electronic identification number
• Computer's internet protocol address or routing code

Covered Account:  1) An account primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions; or, 2) Any other account for which there is a reasonably foreseeable risk to customers or the safety and soundness of the financial institution or creditor from identity theft.

Creditor:  An entity who arranges for the extension, renewal, or continuation of credit, which in some cases could include third-party debt collectors.

Credit:  The right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment or to purchase property or services and defer payment therefore.

Customer:  Any person with a covered account with a creditor.

Service Provider: A person, or entity, that provides a service directly to the financial institution or creditor.

The Program

The Red Flag regulations list the four core elements that must be included in the program of a financial institution or creditor.  Willamette University has incorporated the following four core elements into its program:

1. Identifying Relevant Red Flags:  The University will identify relevant red flags for the covered accounts that it offers or maintains and incorporate those red flags into its program.
2. Detecting Red Flags:  The University will detect and record red flags that have been incorporated into its program.
3. Preventing and Mitigating Identity Theft:  The University will respond appropriately to any red flags that are detected to prevent and mitigate identity theft.
4. Updating the Program:  The University will periodically update the program to reflect changes in risks to customers and to the safety and soundness of the University in its role as creditor.

The University's program shall, as appropriate, incorporate existing policies and procedures that control reasonably foreseeable risks.

Identification of Relevant Red Flags

In order to identify relevant red flags, the University considers the types of covered accounts it offers and maintains, the methods it provides to open its covered accounts, the methods it provides to access its covered accounts, and its previous experience with identity theft.  University personnel should be aware of and monitor for applicable red flags.  The following is a categorized listing of relevant red flags that personnel should use as a guide in this process:

            Suspicious Documents

1. Identification document or card that appears to be forged, altered or inauthentic.
2. Identification document or card on which a customer's photograph or physical description is not consistent with the person presenting the document.
3. Other document with information that is not consistent with existing customer information.
4. Application for service that appears to have been altered or forged.

            Suspicious Personal Identifying Information

1. Identifying information presented that is inconsistent with other information the customer provides (example: inconsistent birth dates).
2. Identifying information presented that is not consistent when compared against external information sources used by the University (example: an address not matching an address on a credit report).
3. Identifying information provided is associated with known fraudulent activity as indicated by internal or third-party sources used by the University.
4. Identifying information provided is of a type commonly associated with fraudulent activity as indicated by internal or third-party sources used by the University.
5. Social security number presented that is the same as one given by another customer.
6. An address or phone number presented that is the same as one given by another customer.
7. A customer fails to provide complete personal identifying information on an application when reminded to do so.
8. A customer's identifying information is not consistent with the information that is on file for that customer.

            Unusual Use of, or Suspicious Activity Related to, the Covered Account

1. Change of address for an account followed by a request to change the customer's name.
2. A credit account is used in a manner commonly associated with known fraud patterns (example: customer fails to make the first payment or makes an initial payment but no subsequent payments).
3. Account is used in a way that is not consistent with prior use.
4. Mail sent to the customer is returned repeatedly as undeliverable although transactions continue to be conducted in connection with the customer's covered account.
5. Notice to the University that a customer is not receiving mail sent by the University.
6. Notice to the University that an account has unauthorized activity.
7. Breach in the University's computer system security.
8. Unauthorized access to or use of student account information.

            Alerts, Notifications or Warnings from a Consumer Reporting Agency

1. Report of fraud accompanying a credit report.
2. Notice or report from a credit agency or a credit freeze on an applicant.
3. Notice or report from a credit agency of an active duty alert for an applicant.
4. Receipt of a notice of address discrepancy in response to a credit report request.
5. Indication from a credit report of activity that is inconsistent with an applicant's usual pattern or activity.

            Alerts from Others

1. Notice to the University from a customer, a victim of identity theft, a law enforcement authority, or any other person that has opened a fraudulent account for a person engaged in identity theft.

Detecting Red Flags

The University's general red flag detection program is described below.  Each department will develop and implement specific procedures appropriate to meet the requirements of this program.

A. Opening of Covered Accounts

In order to detect any of the red flags identified in the above section associated with the opening of a new covered account, University personnel will take appropriate steps to verify the identity of the person opening the account.  The steps may include, but are not limited to the following:

• Require certain identifying information such as a name, date of birth, home address, academic records, driver's license or other identification.
• Verify the customer's identity (example: review a driver's license or other identification card).
• Independently contact the customer.

B.  Existing Covered Accounts

In order to detect any of the red flags identified in the above section for an existing account, University personnel will take appropriate steps to monitor transactions on an account.  The steps may include, but are not limited to the following:

• Verify the identification of customers if they request information (in person, via telephone, via facsimile, via e-mail).
• Verify the validity of requests to change billing addresses.
• Verify changes in banking information given for billing and payment purposes.

Preventing and Mitigating Identity Theft

In the event University personnel detect any identified Red Flags, such personnel shall take appropriate steps, depending on the degree of the risk posed by the red flag.  The steps include, but are not limited to the following:

1. Continue to monitor a covered account for evidence of identity theft.
2. Contact the customer.
3. Change any passwords, security codes, or other security devices that permit access to a covered account.
4. Reopen a covered account with a new account number.
5. Not open a covered account.
6. Close an existing covered account.
7. Notify the Program Administrator for determination of the appropriate step(s) to take.
8. Notify law enforcement.
9. Determine that no response is warranted under the particular circumstances.

Updating the Program

The Program will be periodically reviewed and updated to reflect changes in the risks to customers or to the safety and soundness of the University from identity theft, based on factors such as:

1. The experiences of the University with identity theft.
2. Changes in methods of identity theft.
3. Changes in methods to detect, prevent, and mitigate identity theft.
4. Changes in the types of accounts that the University offers or maintains.
5. Changes in the business arrangements of the University, i.e., joint ventures, new service provider arrangements.

Administration of Program

The Red Flag regulations enumerate certain methods that financial institutions and creditors must undertake to administer the program.  The University has incorporated the following methods into its program:

1.  Oversight of the Program

The Finance Committee, on behalf of the Board of Trustees, has designated the Vice President for Financial Affairs to serve as the Program Administrator.  The Program Administrator will be responsible for the oversight of the Red Flag Program.  The responsibilities of the Program Administrator will be as follows:

• Ensure appropriate training of staff on the program.
• Review any staff reports regarding the detection of the red flags and the steps for preventing and mitigating identity theft.
• Determine which steps of prevention and mitigation should be taken in particular circumstances.
• Consider periodic changes to the Program.

2.  Staff Training

The Program Administrator will ensure that applicable departments are training their staff in the detection of red flags and the responsive steps to be taken when a red flag is detected.  University staff shall be trained, as necessary, to effectively implement the Program.  All employees are expected to notify the Program Administrator once they become aware of an incident of identity theft or of the University's failure to comply with the Program.

3.  Reporting

The Program Administrator will annually report to the Finance Committee regarding the University's compliance with this Program.  This report will address such issues as the effectiveness of the Program in addressing the risk of identity theft in connection with the opening of covered accounts and with respect to existing covered accounts, service provider arrangements, significant incidents involving identity theft and the University's response, and recommendations for material changes to the Program.

4.  Oversight of Service Provider Arrangements

In the event that the University engages a service provider to perform an activity in connection with one or more covered accounts, the University will take steps to ensure that the activity of the service provider is conducted in accordance with reasonable policies and procedures designed to detect, prevent, and mitigate the risk of identity theft.  Such steps may include the following:

• Require by contract, that the service provider have policies and procedures to detect relevant red flags that may arise in the performance of the service provider's activities.
• Review a copy of the service provider's identity theft policies and procedures.
• Require, by contract, that service providers review the University's Program and report any red flags to the Program Administrator.

Approved:

Committee on Financial Affairs & Audit, Board of Trustees

April 29, 2009