Consumers should feel confident about sharing their personal information with businesses, it has been suggested.
The Communications Consumer Panel has claimed that organizations must ensure that customers are made aware that their personal details will be secure before collecting any information.
It noted that companies must be able to outline to the public what steps they are taking to protect their privacy.
This includes making customers clearly aware whether they allow third parties to have access to certain pieces of information.
Bob Warner, acting chairman of the group, commented: "Consumers have told us that they are more comfortable sharing information when they are aware of and have control over what they are disclosing."
According to a survey by the Communications Consumer Panel, just half of those polled read a company's privacy policies on a regular basis, while 79 per cent admitted they are worried about their personal details being sold to third parties.