Prisoners are being employed to gather insurance details from members of the public at call centres set up inside jails.
The Ministry of Justice has confirmed inmates are working as call centre operatives at HMP Oakwood in Wolverhampton and HMP Drake Hall in Staffordshire.
They carry out market research for insurance companies as part of a scheme officials claim prepares them to return to work after their release.
Without revealing they are in jail, they read from a script, which reports suggested included asking possible customers their names and postcodes.
It was also claimed prisoners would inquire about the total value of homeowners' possessions and any items that were particularly valuable.
Government sources made clear the workers do not have access to the "full address details" of any members of the public.
And they also said the scripts used did not "require" inmates to find out about the value of possessions owned by the customer.
The Ministry of Justice said prisoners should not 'sit idle'The cold callers work from secure computers with no internet access and are not allowed a pen to stop them recording any of the data.
A Ministry of Justice spokesman said: "We do not want prisoners sitting idle in their cells when they should be working towards their rehabilitation.
"We prepare offenders for work inside prison so they can get a job after release. This reduces the chances that they will reoffend in the future, meaning lower crime and fewer victims.
"All prisoners working in call centres are risk assessed and stringent security measures are in place, with calls supervised and recorded."
However, critics warned the scheme could put customers are risk.
Peter Cuthbertson of the Centre for Crime Prevention told The Sun: "Trusting criminals with people's financial details is incredibly naive. Burglars will know who to target when they are released."
HMP Drake Hall has been a prison for women since the 1970s, while HMP Oakwood, which is now run privately by security firm G4S, is a prison for men.
The MOJ announced plans to pay prisoners to work in call centres last year to enable them to learn new skills.
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