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Reporter Debrief: RFID chips

(KMOV) -  Someday the clothes you wear could spy on you.

Retailers have big plans for tiny microchips which are already used in many ways and are probably a part of your life right now.

But, they could be used to track what you buy and where you go without you knowing it.

The same technology that can help identify a lost dog, start a car without a key, and pay at the pump without cash or a card, could be used to spy on you.

Keyless entry cards are example of the technology, its call radio frequency identification or RFID.

A reader uses a radio signal to pull the information off a microchip inside, telling it who the user is and if he or she is authorized to enter.

The technology has been around, but new RFID chip uses have earned them the nickname ‘Spychips’.

Some tags are so tiny they can be embedded in a sheet of paper and hidden from view.

Wal-Mart is a major player driving the use of them, as a tool for tracking inventory.

Anyone that's selling to the Wal-Mart and Department of Defense right now, every pallet has to have an RFID tag on it, says Marilyn Elkin, who sells RFID tags and equipment.

A reader can scan the chips on pallets in trucks, instantly recording the entire contents in a computer, updating inventory records.

Eventually Wal-Mart and other retailers want to put RFID chips on every product.

Imagine a world where everything you buy and take home is numbered, identified and tracked.

Readers could be hidden in doors, walls and floors to electronically frisk you at invisible checkpoints in the name of market research.

Scanners could read ‘Spychips’ in trash to study shopping patterns.

If the chips are embedded in new vehicles, police could track your comings and goings with readers at key intersections.

Got nothing to hide from those who'll do the spying?

"You have to also assume that they never do anything wrong, it's always for the personal, best of the public interest and that's really, history has proven that's not the case," says Washington University adjunct Professor Scott Granneman.

RFID chips can be used make purchases from coffee shops to convenience stores.

The chips are in a new breed of credit cards just wave it near a reader and are on your way.

Your account number is encrypted, but the card could potentially broadcast your presence in stores, setting off targeted ads. A futuristic intrusion of your privacy that's a lot closer than you think. And RFID readers can be adjusted to read chips from tens or even hundreds of feet away. Just walking by a store or through the mall puts you at risk of a rogue purchase applied to the chipped card in your pocket.

The RFID industry opposes regulations, but Missouri State Senator Maida Coleman sees a need to warn the public about what's coming, so she's proposing legislation.

"I’m just saying let me know if what I’m wearing, if what I’m purchasing has this device in it. I don’t think that's asking too much," says Coleman.

Some of the applications for RFID chips make sense, but privacy advocates say rules are needed or someday your own clothes may be spying on you.

"There's going to be some pretty sensitive information that most people would be very nervous that it's potentially being broadcast to anyone," added Professor Granneman

The FDA gave approval to an implantable chip that could be used to track wandering Alzheimer’s patients or provide a paramedic instant access to medical records in an emergency.

A spokesperson for MasterCard told News 4 they haven't seen any increase in fraud or security problems since rolling out their RFID chipped cards.

But suspicion is growing, this year California became the third state to pass a law banning the implantation of "Spychips" in humans without their consent.