Aug 12, 2010 07:34 GMT  ·  By

Indiana University scientists say that outfitting individual, retail products with radio-frequency identification (RFID) chips may be detrimental to consumers' privacy. Their findings echo concerns expressed by privacy groups around the world, which see RFID as a way of keeping tabs on everyone.

Installing special electronic inventory tracking tags on products may seem like a good thing for companies to do, but in fact this may destroy our individual freedoms. The conclusion belongs to two information security experts at the IU, in West Lafayette, Indiana.

Many manufacturers and retailers currently employ RFID chips to track pellets of merchandise through their own supply and distribution system. But now, they want to employ the same technology to track customers inside stores.

When you buy a product featuring a RFID chip – which is often unmarked – you may become the target of a computer program that analyzes your movement patterns through the store. But this is not as bad as not having the chips turned off, and permanently disabled, once you exit the store.

According to the Purdue team, nefarious individuals could track the products you buy with little difficulties, using a rather inexpensive combination of equipment. The researchers say that companies need to be very careful of how they implement RFID chips in the retail process.

“Someone interested in what you are doing – to snoop, to market to you or to use that knowledge for gain – might be very interested in detecting what you buy without the risk of being noticed watching you at the store,” says Eugene H. Spafford.

He is the director of the Purdue Center for Education and Research in Information Assurance and Security (CERIAS). The expert is an adviser to the White House and the Pentagon on national security issues related to cybercrime and abuse.

Among the groups that may be interested in our purchasing habits, the expert mentions marketers, thieves, insurance companies, employers, bill collectors, litigants, ex-spouses, or government agencies. These groups could find out if you buy pharmaceuticals, birth control devices, reading materials, luxury items, alcohol, and unhealthy foods.

“The goal of at least one influential retailer is to eventually manage all inventory with the tags”, Spafford adds. Purdue assistant professor of communication Lorraine Kisselburgh, who is a privacy researcher, says that most people find that the idea of retailers tracking them through space via RFID chips is “creepy” and “stalking.”

“Research indicates consumers are willing to make certain tradeoffs of their privacy for benefits such as convenience and discounts. But individuals want to know when there is a potential that their privacy might be at risk, and they want to retain control of the choice to change that level of risk,” she concludes.