The US Defence Department is warning contractors of the danger of Canadian coins containing tiny radio transmitters being used to follow their movements.

The claim comes in the appendix to "Technology Collection Trends in the US Defence Industry" - an annual look at high-tech spying developments.

This warns defense contractors: "On at least three separate occasions between October 2005 and January 2006 cleared defense contractors' employees travelling through Canada have discovered radio frequency transmitters embedded in Canadian coins placed on their persons."

Other recent cases include an American male translator seduced by "a female foreign national" in order to get his network password and a defense contractor caught recording classified briefings using a voice-recording pen.

It seems unlikely that Canada would be spying on US defence department staff but some reports suggest France, China or Russia could be involved.

Other observers have questioned the utility of a radio transmitter inside a coin - it is unlikely to be able to transmit very far through the coin and small change is highly likely to end up in a parking meter, payphone or vending machine rather than staying in the pocket of the person you are trying to follow.

Traditional passive radio frequency identification chips also suffer from quite limited ranges.

The booklet notes that Information Technology Systems were most often targetted by foreign spies, the second most popular technology type was lasers.

The booklet is available for download from (Pdf.) here. Make sure you are wearing your foil hat.®