Increasingly, passive tags are being replaced with tiny, battery-operated "active" tags that continuously transmit signals as far as 300 feet. Those signals could be picked up by anyone with an RFID scanner.
In 2006, for example, IBM received patent approval for a system that could be "used to monitor the movement of the person through the store or other areas."
That "or other areas" is what spooks privacy advocates. At the moment, there are few limits on how this technology can be used.
"The notion that we're building a surveillance society is very real," said Sophia Cope, a staff attorney at the Center for Democracy and Technology, which focuses on civil liberties in the digital age.
Although she acknowledged the myriad benefits of RFID technology, Cope said it was all too easy to imagine cellphone tags being used to monitor people's activities from morning to night.
In a messy divorce case, for instance, records could be subpoenaed from wireless companies that would show not just where and when you made a purchase, but also precisely where you went afterward and how long you stayed there.
Cellphone services already have the ability to pinpoint users on their network. What makes RFID more troublesome is the ease with which the technology can be exploited by others -- that is, companies and government agencies that don't operate wireless networks.
Similarly, tags could be constantly beaming people's name, address and bank account number to anyone capable of picking up the signal, potentially ushering in a new era of identity theft.
"I'd like to say this technology can be controlled," Cope said. "But there's a lot of room for abuse if this isn't implemented correctly."
Desautels at CTIA said the wireless industry is aware of the security concerns surrounding RFID.
"Is there a danger here?" he asked. "No one in the industry has minimized the need to protect consumer information."
It's still early enough in the game for regulators to protect consumers. Some suggestions:
* All RFID-equipped cellphones should have the capability to switch off the technology or at the very least to block the signal. It shouldn't be an all-or-nothing proposition.
* Cellphone makers should be required to produce non-RFID handsets for people with no desire for electronic payments.
* Consumers should be clearly informed about what types of information will be stored on their RFID tags, and should be given the ability to make changes as they see fit.
* Sales of RFID scanners should be limited only to those with a legitimate need to possess the technology.
* Laws should be passed clearly defining the circumstances under which companies and government agencies can track RFID tags and requiring court orders for the technology to be used for surveillance purposes.
There were more than 243 million wireless subscribers nationwide as of June 2007. Considering the stakes, does anyone really think this is a technology that should be left to the honor system?
Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to email@example.com.