Hands-Free Pickpocketing

The chips transmit data a short distance through the air when activated by an external electromagnetic signal, making it possible for you to pay for something just by waving your card in front of a sensor.

But this also means that a scammer could walk through a crowd waving a small reader device near people's pockets and handbags to read the plastic inside without actually handling it. The reader then transfers the data to the thief's laptop computer.

So far, there's no proof that RFID skimming has been used in identity theft, reports the Identity Theft Resource Center. But that doesn't necessarily mean it hasn't happened — in many cases, it's impossible to know how a particular victim's information was stolen.

Does your card have such a chip? It probably does if you can do transactions without a swipe. If you want to be certain, call the toll-free number on the back of your card and ask.

In addition to credit and debit cards, the technology is found in security-entrance passes and passports, transit fare cards and automatic checkout at libraries. It's used in antishoplifting gates at store exits — if an alarm sounds when someone walks out with an unpaid-for item, it means that an RFID chip in the item hasn't been removed or deactivated by a cashier.

Although RFID isn't new, "electronic pickpocketing" concerns resurfaced recently following a news report by Memphis TV station WREG.

For that report, security specialist Walt Augustinowicz used a reader device to scan 26 wallets and purses of passersby on a crowded street (his company, ID Stronghold, sells products that protect against RFID snooping). Nearly 20 percent had cards with RFID chips.

In some cases, he was able to get the full account number and other crucial data; in others, he got only a portion. But it can be enough to make fraud possible, Augustinowicz says.