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Two toddlers play in a baby's room, joined a few seconds later by a nanny who takes a seat in a rocking chair. She picks up one of the children, hugs her and whispers in her ear, then tickles the smiley toddler while the other child runs around the room giggling hysterically.

It's a private moment in a private dwelling - but there's nothing private about it.

Sitting outside is a white minivan driving slowly through this Beach neighborhood. Inside the van is a man holding a low-cost radio receiver out the passenger window and balancing a small television monitor on his lap. It's a simple set-up, but enough to intercept the signal of a tiny wireless video camera monitoring the toddlers' room.

These wireless "nanny" cams, bought on the Internet for less than $130 and self-installed by many parents as a way to keep tabs on their children during the day, are becoming popular tools of home surveillance in Canadian and U.S. neighborhoods.

But parents may not be the only ones checking up on the kids.

The man in the van, local privacy expert Peter Hope-Tindall, can see and hear everything going on in the room - a demonstration of how vulnerable people make themselves when they use such technologies. Ironically, all it takes to eavesdrop is the same wireless receiver used for the "nanny" cam itself. Hope-Tindall is on a mission to educate consumers about the security and privacy problems of using certain wireless products, sold in huge volumes over the Web without adequate consumer warnings.

"We're unwittingly letting someone peek inside our children's bedrooms," he says, adding that wireless camera signals inside the home or small businesses can be intercepted for other nefarious purposes. "What a way for a criminal to case your place or find out if someone is home, using your own camera."

Hope-Tindall, chief privacy architect of dataPrivacy Partners Ltd., doesn't know the exact home where this specific interception took place, because the wireless signal has a range of more than 100 feet and could have come from dozens of area homes.

A patient criminal, however, could easily monitor the area and determine the address over time, while a voyeur may be happy to anonymously observe the intimate conversations and interactions within a nearby home, just for sick kicks.

Worse still, there's nothing stopping a tech-savvy peeping Tom from putting live video of your children or private communications on the Internet for the world to see and hear. It's the ultimate reality TV but unlike The Osbournes, it can be done without your knowledge or consent.

Like the known privacy risks of speaking on wireless handsets or cordless phones, Hope-Tindall says the public needs to know that affordable wireless video kits, sold in the name of home security, can ironically lead to an unprecedented level of privacy and security breaches by perfect strangers, or perhaps somebody you know.

(Readers should note the video interception in the Beaches was limited to a few seconds to demonstrate the ease with which a homeowner's privacy can be violated. The picture that accompanies this story is of a different family and was taken under controlled circumstances with the family's permission.)

"This is sometimes what happens to technology, it has the opposite effect to what people use it for," says Michael Erdle, a privacy and Internet lawyer with Toronto law firm Deeth Williams Wall LLP. "I think right now that most people (using these cameras) would assume there's a level of encryption going on there, and there isn't."

Most of the video cameras used in homes come from Seattle-based X10 Wireless Technology Inc., which is perhaps best known for its suggestive pop-up Web advertisements that have flooded the Internet over the past year. Many of the ads promote the "Amazing X10 Cameras" for home security or nanny cams, while other ads such as one displaying a pretty woman in a bathing suit hint at different uses.

X10 continues to be one of the most visible advertisers on the Internet, translating into huge sales across North America.

"We are an aggressive Internet advertiser, and it has worked well for us," said Jeff Denenholz, public relations director for the company, which sells its products exclusively over the Internet. "I can say these things have gotten extremely popular, and we're selling lots in Canada."

Software called XRay Vision takes what the camera sees and allows users or signal hijackers to view it over the Internet or on a home PC. The signal can be set to one of four channels, but somebody trying to intercept the signal need only alternate among the four to eventually lock in on a clear image.

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`Most people (using these cameras) would assume there's a level of encryption going on there, and there isn't.'

Michael Erdle,

Privacy lawyer

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Denenholz, pointing out that X10 is a private company with no obligation to release financial details, stopped short of providing geographic sales or unit figures. But past reports suggest roughly half of the company's revenues, which exceed $50 million (U.S.) a year, come from sales of wireless cameras. It is estimated that the company has likely sold hundreds of thousands of the tiny devices since it was founded in 1999 as a unit of Hong Kong-based X10 Ltd.

Asked whether the boxes or packaging the cameras are shipped in contain any warnings about signal interception or privacy risks, Denenholz admitted that they don't, but would not comment any further.

"All we can say is we don't see an issue with security," he said. "I'm not able to officially comment."

Use of these cameras does not yet seem as widespread in Canadian cities such as Toronto as it is in technology hotspots in the United States such as San Francisco, where high-tech toys tend to be more readily gobbled up.

Still, a drive around a number of Toronto neighbourhoods shows the cheap little devices are catching on. In the Annex, one in-home camera is aimed at what appears to be a student's record collection and book cabinet, while several other homes have pointed the cameras at their front doorstep to monitor visitors.

Near Queen St. W. and Ossington Ave., a camera in someone's apartment monitors the parking lot of the Centre for Addiction and Mental Health. Back in the Beach, a number of small stores along Queen St. E. and Kingston Rd. have wireless cameras pointed at cash registers and clientele often without their knowledge.

At one RadioShack store in the Toronto area, Hope-Tindall drove more than 250 metres away and was still able to pick up a clear colour signal of an employee talking with a customer a good way to monitor employee movement and secretly case the store. When The Star brought this to the store manager's attention, he said he wasn't aware of the security vulnerability.

"But what can you do?" he said. "This is the way technology is going."

Hackers do the same thing with wireless data networks, cruising neighbourhoods and industrial parks trying to intercept corporate data using an inexpensive receiver, a laptop and some simple software. Called "war driving," it has emerged as a major security risk for businesses and is treated as a serious offence.

It's unclear whether video eavesdropping is legal or not in the United States, but criminal law in Canada would seem to cover such an action if done with intent.

Section 184 of the Criminal Code makes it a crime, punishable of up to five years in prison, to "listen to, record or acquire a communication or acquire the substance, meaning or purport thereof." To address a concern that emerged in the late 1980s regarding eavesdropping on cellular phone conversations, section 184.5 was enacted, making it an offence if such a cellular interception is done maliciously or for gain.

Disclosure of such communications, such as through a feed on the Internet, is likely to be caught by section 193. At issue may be whether a video image alone is considered a private communication. But Erdle believes video and audio would be treated the same way.

"The communication doesn't have to be audio," he says. "Communication has to be an exchange of information, and video is a communication."

Erdle says it may come down to whether people using this technology have a reasonable expectation of privacy, though he adds from a peeping-Tom perspective there's the more general charge of public nuisance or mischief, as well as the likelihood of civil action for invasion of privacy or even stalking.

"Obviously, there are no cases on it," he says.

Michael Geist, an Internet law professor at the University of Ottawa, agrees there is no legal precedent for intercepting wireless cameras in the home, but adds it's only a matter of time.

"As these technologies proliferate and certain people understand the ability to manipulate that technology, the law can't be far behind," he says.

In the meantime, Geist says consumers should educate themselves on the risks of using these technologies.

"There are a whole slew of precautions that people ought to be taking, for everything from mundane e-mail to providing credit-card information (over the Internet) to more sophisticated activities like this. You may feel like you're acting in a private room, but in reality, you're often sharing what you do with the entire world."