Data from Consumer Reports.

Not many consumers know about Radio Frequency Identification (RFID), a wireless technology that allows objects and people to be tagged and tracked. RFID tags contain microchips and tiny radio antennas that are embedded in all kinds of products, credit cards, or stuck on labels. A three-month investigation in the June 2006 issue of Consumer Reports has found the RFID industry lacking in the necessary measures to strengthen tag security against identity thieves.

RFID technology offers huge cost savings to business and it offers consumers conveniences such as speedier checkouts, and public benefits, including ways to manage toxic waste and encourage recycling. However, the tags are also a powerful new means of data collection about consumers, the things they buy, the books they read, and the places they travel. During the investigation, Consumer Reports found:

  • Consumers are barely aware of RFID technology, yet its use is exploding, with sales of an estimated 1.3 billion tags this year.

  • RFID tags are currently being used in credit cards, prescription-medicine packaging, computer equipment, TVs, clothing, cell phones, and the workplace. Soon the tags will be embedded in tires for safety recalls.

  • Plans to use RFID tag technology include incorporating tags into the entire drug-supply chain, and they already are being used in packing for prescription medicines such as Viagra.

  • The U.S. government has begun issuing new e-Passports, which contain an RFID chip in the back cover. The chip in the e-Passport will have enough memory to add fingerprints or iris patterns in addition to basic data already in the passport.

  • The potential for snooping has increased dramatically. Security experts in the U.S. and abroad have cracked payment devices and chips implanted in humans.

  • In an effort to patch up privacy protections, at least seven states are considering RFID bills of varying quality.

  • The RFID industry has mounted a subtle PR campaign to fend off consumer and government objections and to forestall government regulation.
The report appears in the June 2006 issue of Consumer Reports, which will be availabe May 9th and is also available online.

How RFID Tags Work

An RFID tag contains a microchip and a tiny radio antenna. The tag broadcasts the unique identifying number of the item to any compatible reader within range, from a few inches for credit cards, up to 20 feet for merchandise tags, and up to 750 feet for battery-powered tags in toll passes. The reader then communicates with a computer database, where information linked to that ID number is stored, such as details about when a product was manufactured or medical records for people who have tags implanted. That database in turn can be linked to other networks via the Internet to allow for more widespread data sharing.

Privacy Concerns

While the RFID business steams along, several matters remain unaddressed. Several data-security experts recently demonstrated that when information is communicated wirelessly between RFID devices and readers, for example, it's possible to eavesdrop electronically and to pluck sensitive information out of thin air. Some argue that RFID technology could give the government a ready-made surveillance system as scanners become ubiquitous.

Federal agencies and local law-enforcement agencies already negotiate contracts with private data collectors to obtain personal information they might otherwise be legally prohibited from collecting. Commercial data brokers such as ChoicePoint, Lexis-Nexis, and Acxiom compile computerized dossiers that in one click reveal to government agencies, potential employers, loan officers, or private investigators information that may include your home address, phone number, Social Security number, photograph, legal transgressions, details about divorces, and financial records, among other personal data.

The idea that a tiny radio chip might be traveling in their shirts or shorts doesn't sit well with Americans. The public unease has put the RFID industry on the defensive and its leaders proclaim the importance of addressing the consumer's privacy concerns. But when Consumer Reports asked to discuss the subject with executives of one company, attempts were stonewalled by public relations representatives.

"It's essential to develop the proper framework to protect consumers from the unprecedented privacy and identity theft risks that come with RFID," said Andrea Rock, senior editor at Consumer Reports.