Contact: John Harrington – 707.252.6166
FOR IMMEDIATE RELEASE
May 17, 2006
Napa, California
RFID Risks to Public
SEC omits shareholder resolution asking for a consumer risk report from Applied Digital Solutions
The Securities and Exchange Commission (SEC) has allowed Applied Digital Solutions, Inc. (ADSX) to prevent shareholders from voting at the 2006 annual meeting on a resolution asking the company to report risks associated with the sale and use of radio frequency identification (RFID) microchips. The SEC permitted ADSX to omit the resolution from shareholder proxy material because they consider "product development" to be "ordinary business."
"The SEC has again failed to allow shareholders to gain important information about their company's involvement in developing technology that may allow the commercial invasion of customer privacy," said John Harrington, president and CEO of Harrington Investments, Inc. (HII), the Napa, California based socially responsible investment advisory firm that sponsored the shareholder resolution. "Not only will corporations be able to spy on consumers through the use of this technology, in the future it could possibly provide criminals and terrorists access to important personal information, leading to identity theft, as well as breaches in national security."
Citing several highly publicized breaches of RFID technology, including German phone cards, French bank cards and Exxon Mobil gas cards, the shareholder resolution posed the possibility of these microchips being read from greater distances, increased availability of hand-held readers, and access to personal information stored in medical and financial databases. It concluded that these factors are a threat to the "public's privacy, personal safety, and financial security."
Soon, many U.S. citizens could be carrying microchips containing personal information. In October of 2006 the State Department plans to issue passports containing RFID chips. In May of 2008 the Real ID Act takes effect, allowing Homeland Security to issue federally approved ID cards that are electronically readable. It will be up to the Department of Homeland Security to determine what the federal standards for this ID card will be and whether it will contain an enhanced bar code, magnetic strip, or RFID chip. This ID card will be necessary for opening a bank account, traveling on a plane, collecting Social Security, or using almost every service available from the government. Drivers' licenses will probably have to be reissued to meet these new federal standards. Essentially, it will be creating the equivalent of a national identity card.
Harrington concluded by saying, "Not only will U.S. government agencies be able to scan and glean personal information from ID cards, drivers' licenses, and passports, but other 'unauthorized' persons may also be able to do so. In effect, we may be creating a national electronic Pass System much more sophisticated that the South African apartheid government could have ever envisioned. The only difference will be that criminals and terrorists may also have access."
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