New Hamp. Legislators Address RFID Concerns

Published May 1, 2007

Controversy over the use of Radio Frequency Identification (RFID) continues to grow as New Hampshire has reintroduced legislation to regulate the use of RFID chips in consumer products and entirely ban their use in government documents such as driver’s licenses.

Currently, RFID chips are used in certain point-of-sale devices, such as ExxonMobil’s EasyPass, tollway passes, and building access cards that many employers issue. Retailers use RFID to track shipping pallets and containers.

RFID Retail

RFID chips to date have not been incorporated into packaging on any widespread basis. The only exception is in the pharmaceutical industry, which uses RFID to keep counterfeit prescription drugs out of the supply chain.

Reflects Growing Concerns

The New Hampshire bill reflects growing legislator and voter concerns over the increasing use of RFID chips by large retailers such as Wal-Mart and Target to track inventory as it moves through the supply chain. At least three states have drawn up legislation against government plans to incorporate RFID chips into passports and driver’s licenses. Consumer activists and civil libertarians say use of the chips and the information they gather can lead to wholesale invasions of privacy.

The New Hampshire bill, H.B. 686, would require retailers to label any products, such as food, apparel, or appliances, that contain RFID chips. It would exempt devices that incorporate RFID and other radio tracking technology as part of their essential mechanisms, such as cell phones, WiFi cards, and global positioning system (GPS) receivers.

The bill, introduced in February, revives but clarifies a failed 2005 bill that many felt was overly broad in its definitions, especially of radio tracking devices.

“[RFID tagging] is about generating more personal data about individual consumers, which can then be mined and sold. I still maintain that it is fraud for a retailer to take something of value from a customer without their knowledge and consent,” said state Rep. Joel Winters (D-Hillsborough), a member of the House Commerce Committee, to which the bill has been referred.

“Look at supermarket ‘loyalty cards,’ which exist solely for tracking our purchases,” Winters said. “Read the privacy policy of most large chains; Home Depot, for example, promises to keep a record of your transactions if you use a credit or debit card. I don’t believe that the idea retailers will just stop collecting data is correct.

“There is also precedent for retailers to exchange information with each other; as they might do with RFID tag numbers,” Winters said. For example, RFID data might be used to track an individual customer’s return history. “Some retailers share that information to create sort of a return blacklist,” he said.

Government Uses Cause Worry

The New Hampshire bill also would prohibit forced implantation of an RFID chip in a person. Police would have to obtain a court order to use RFID to track an individual electronically.

The bill itself, like at least 17 others that have been introduced in state houses around the country, reflects the two sides of the RFID coin, commercial and government. While commercial applications largely are geared toward tracking items, government applications are geared toward tracking individuals.

Concerns in the latter case have led to resolutions rejecting the U.S. government’s proposed Real ID Act of 2005, which aims to standardize the information on state driver’s licenses and require them to contain RFID chips. Maine legislators approved such a resolution in January. Similar bills are pending in Georgia, Massachusetts, Montana, and Washington. Idaho, Maine, and Montana have introduced such bills. New Hampshire has also introduced a bill, sponsored by Winters, that would prohibit the state from participating in any national ID card system.

RFID Government

Industry groups such as the Smart Card Alliance say RFID labeling laws raise costs for business and hit small retailers especially hard. The Smart Card Alliance also says the capability of the technology to be used by unauthorized third parties to hijack personal information has been overhyped and misportrayed in the media. In reality, supporters of the technology say, RFID helps reduce manufacturing costs and protects consumers by keeping counterfeit products out of the supply chain.

The Smart Card Alliance advocates a series of policy steps (see accompanying tables) for both retail and government applications, including deactivation of any RFID chips embedded in a package or product upon purchase and the use of encryption in documents.

Critics of RFID legislation also say fear over the technology’s role in identity theft is misplaced. They point out that identify theft is now largely a component of organized crime, which seeks the volume that can be acquired only through bribery or theft of devices such as laptops, disks, and memory cards that contain large amounts of personal data.

Human Implants Considered

The implantation of RFID chips in individuals remains a hotly debated topic. VeriChip Corp., for example, sells FDA-approved RFID chips, about the size of a grain of rice, designed for human implantation that would carry medical information about the individual. In Florida, VeriChip and the Alzheimer’s Community Care Association of Palm Beach and Martin Counties Inc. have begun a two-year study to determine whether it’s practical to implant tiny computer chips containing medical records in dementia patients.

“People with Alzheimer’s and dementia are our most vulnerable population, particularly during hurricane season. We’re hoping this kind of technology creates a safer environment for them and creates higher efficiency in the emergency room,” Mary Barnes, president and chief executive of Alzheimer’s Community Care, told the South Florida Sun-Sentinel.

Civil libertarians, however, fear that without adequate safeguards RFID use presents something of a “slippery slope,” where RFID implantation in the elderly and children becomes more of a convenience for family and caregivers than a necessity for patient safety.

“In families that receive the VeriChip implants, the children have been left with no choice but to comply with their parents wishes. Also, VeriChip has announced plans to implant Alzheimer’s patients in Florida with RFID chips. I don’t believe they can give consent, although their legal guardians will have to,” said Winters.

“In Mexico, a number of bureaucrats were implanted with RFID chips,” Winters noted. “I assume that they were told if they wanted to keep working, they would have to comply. It’s very possible that this will be a condition of employment here in the U.S. in the future.”

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.

For more information …

Glenn Singer, “Study to look at planting identification chips in dementia patients,” South Florida Sun-Sentinel, February 23, 2007,,0,139269.story?coll=sfla-business-headlines