Threat Level Privacy, Crime and Security Online

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Threat Level Privacy, Crime and Security Online
VeriChip’s Merger With Credit Monitoring Firm Worries Privacy Activists

    : Identification, RFIDchip2_f

Remember VeriChip, the Florida company that once dreamed of injecting its human-implantable RFID microchips in everyone from immigrant guest workers to prison inmates?

We haven’t heard much from the company since a dipping stock price nearly got it delisted from the NASDAQ in March. But it’s still alive, and in November it pulled off a seemingly incongruous acquisition. Now called PositiveID, the new company is a merger between VeriChip and Steel Vault, the people behind NationalCreditReport.com.

With a human-implantable microchip maker now running a credit-scoring and identity-theft-protection website, privacy activists are worried again. “The attraction to investors is the potential for synergies,” says Mark Rotenberg, executive director of the Electronic Privacy Information Center in Washington. “You have to anticipate over time there will be an attempt to integrate the services.”

“Sci-fi wise, you could have a chip read by a scanner that determines your credit-worthiness,” says Evan Hendricks, editor of Privacy Times. “Or you could have a credit card implant.”

VeriChip and its former owner Applied Digital have been drawing fire since 2004, when the FDA approved the rice-sized injectable RFID for human use. While the company primarily pushed the chip as part of a system to index medical records — a kind of subcutaneous MedAlert bracelet — Richard Sullivan, then-CEO of Applied Digital, had a penchant for wantonly confirming every nightmare of cybernetic social control.

After 9/11, it was Sullivan who announced the VeriChip would be perfect as a universal ID to distinguish safe people from the dangerous ones. He dreamed of GPS-equipped chips being injected into foreigners entering the United States, prisoners, children, the elderly. He thought the VeriChip would be used as a built-in credit or ATM card.

Indeed, in 2004, one of VeriChip’s earliest deployments was at a Barcelona nightclub, where VIP patrons could pay 125 euro to get the chip installed in their arms as a debit card for drinks.

But today, Sullivan’s replacement says the company has no plans to market the VeriChip as a path to instant credit, despite the recent acquisition.

With his white-buttondown shirt open at the chest, PositiveID CEO Scott Silverman spoke about the merger in an interview at the company’s office suite in Delray Beach, Florida. “Using the chip to relate to the credit-reporting services of NationalCreditReport.com, or even using it for financial transactions … has not been a part of our business model for five years or more, since Sullivan’s been gone, and is not part of our business model moving forward,” he says.


Silverman also backed away from some of the Orwellian ideas floated by his cyberpunk predecessor. “I can tell you that … putting [the chips] into children and immigrants for identification purposes, or putting them into people, especially unwillingly, for financial transactions, has [not] been and never will be the intent of this company as long I’m the chairman and CEO,” he says.

Yet in 2004, Silverman told the Broward-Palm Beach New Times that the VeriChip could be used as a credit card in coming years. And in 2006, he went on Fox & Friends to promote the chipping of immigrant guest workers to track them and monitor their tax records.

And ahead of the recent merger, VeriChip gave a presentation to investors hinting there would be some cross-pollination between the two sides of the business. It plans to “cross-sell its NationalCreditReport.com customer base” (.pdf) the Health Link service and vice-versa. So, Americans with implanted VeriChips will be encouraged to divulge their finances to PositiveID, while credit-monitoring customers will be marketed the health-record microchip.

Critics of chipping are moved by a variety of concerns, ranging from the pragmatic to the religious — anti-RFID crusader Katherine Albrecht believes the technology is the Mark of the Beast predicted in the Book of Revelation, but also doubts its efficacy as a medical tag: VeriChip’s instruction manual warns that the chip may not function in ambulances and areas where there are MRI and X-ray scanners.

Security is another issue. RFIDs can generally be scanned from distances much greater than the official specs suggest. Nicole Ozer at the ACLU of Northern California notes that after Wired magazine writer Annalee Newitz experimentally cloned her VeriChip in 2006, the company continued calling it secure.

But human chipping has high-profile fans as well, including former Secretary of Health and Human Services Tommy Thompson, who left his job as overseer of the FDA in 2005 — a year after VeriChip’s approval — to join the company’s board of directors. Thompson announced he would personally join the 700 to 900 Americans who have the chip installed in their bodies. (He later reportedly reneged.)

Whatever its plans for the future, PositiveID is focused on its original mission for now: implants tied to medical records. On December 1, the new company announced it’s collaborating with Avocare, a Florida health care business, in the hopes of bringing its “health care identification products” to 1 million patients.

AP Photo/Steve Mitchell