(Agencies)
Updated: 2008-01-27 15:50

Federal agencies and law enforcement already buy information about individuals from commercial data brokers, companies that compile computer dossiers on millions of individuals from public records, credit applications and many other sources, then offer summaries for sale. These brokers, unlike credit bureaus, aren't subject to provisions of the Fair Credit Reporting Act of 1970, which gives consumers the right to correct errors and block access to their personal records.

That, and the ever-increasing volume of data collected on consumers, is worrisome, says Mike Hrabik, chief technology officer at Solutionary, a computer-security firm in Bethesda, Md. "Are companies using that information incorrectly, and are they giving it out inappropriately? I'm sure that's happening. Should we be concerned? Yes."

Even some industry proponents recognize risks. Elliott Maxwell, a research fellow at Pennsylvania State University who serves as a policy adviser to EPCglobal, the industry's standard-setting group, says data broadcast by microchips can easily be intercepted, and misused, by high-tech thieves.

As RFID goes mainstream and the range of readers increases, it will be "difficult to know who is gathering what data, who has access to it, what is being done with it, and who should be held responsible for it," Maxwell wrote in RFID Journal, an industry publication.

The recent growth of the RFID industry has been staggering: From 1955 to 2005, cumulative sales of radio tags totaled 2.4 billion; last year alone, 2.24 billion tags were sold worldwide, and analysts project that by 2017 cumulative sales will top 1 trillion - generating more than $25 billion in annual revenues for the industry.

Heady forecasts like these energize chip proponents, who insist that RFID will result in enormous savings for businesses. Each year, retailers lose $57 billion from administrative failures, supplier fraud and employee theft, according to a recent survey of 820 retailers by Checkpoint Systems, an RFID manufacturer that specializes in store security devices.

Privacy concerns, some RFID supporters say, are overblown. One, Mark Roberti, editor of RFID Journal, says the notion that businesses would conspire to create high-resolution portraits of people is "simply silly."

Corporations know Americans are sensitive about their privacy, he says, and are careful not to alienate consumers by violating it. Besides, "All companies keep their customer data close to the vest ... There's absolutely no value in sharing it. Zero."

Industry officials, too, insist that addressing privacy concerns is paramount. As American Express spokeswoman Judy Tenzer says, "Security and privacy are a top priority for American Express in everything we do."

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