Wesfarmers Ltd (ASX: WES) and JB Hi-Fi Limited (ASX: JBH) have been using facial recognition on unknowing customers in their stores.
That's the finding from consumer advocacy group Choice, which investigated 25 Australian retailers for their privacy credibility.
The enquiry found Wesfamers-owned retailers Kmart and Bunnings, plus JB Hi-Fi's The Good Guys appliance outlets, all used the identification technology on anyone who walked through their doors.
According to Choice consumer data spokesperson Kate Bower, the practice is "a completely inappropriate and unnecessary use of the technology".
"Using facial recognition technology in this way is similar to Kmart, Bunnings, or The Good Guys collecting your fingerprints or DNA every time you shop," she said.
"Businesses using invasive technologies to capture their customers' sensitive biometric information is unethical and is a sure way to erode consumer trust."
Choice announced that it would dob in the retailers to the Office of the Australian Information Commissioner (OAIC) to explore possible breaches of the Privacy Act.
The consumer group also urged the federal government to regulate facial recognition.
Wesfarmers and JB Hi-Fi had not responded to enquiries from The Motley Fool at the time of writing.
Harvested biometric data includes children
What made it worse, according to Bowers, was that 76% of Australians didn't even realise their unique facial data was harvested.
"Choice observed that Kmart and Bunnings display small signs at the entrance of stores where the technology is in use," she said.
"However, discreet signage and online privacy policies are not nearly enough to adequately inform shoppers that this controversial technology is in use."
Bowers added that the biometric data collected included infants and children.
"Choice is concerned that Australian businesses are using facial recognition technology on consumers before Australians have had their say on its use in our community."
"With the government currently undergoing a review of the Privacy Act, now is the perfect time to strengthen measures around the capture and use of consumer data."
Wesfarmers shares have dropped more than 30% since the start of the year, while JB Hi-Fi has seen its stock price fall almost 20%.
