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.
The Government denied claims they could inquire about the total value of homeowners' possessions and any items that were particularly valuable.
Sources also made clear the workers do not have access to the "full address details" of any members of the public.
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.
The Ministry of Justice said prisoners should not 'sit idle'A Ministry of Justice spokesman said: "Prisoners placed in call centres are risk assessed and their work subject to stringent security measures, with calls supervised and recorded.
"At no point can they ask the value of items, record data outside of the secure systems or deviate from a carefully worded script.
"These small pilots are being carefully monitored and would only be rolled out if deemed to be successful."
The spokesman added: "It is crucial that offenders do not sit idle in their cells.
"Ensuring prisoners learn new skills through work opportunities makes them more employable in the future - that means a lower risk of reoffending, lower crime and fewer victims."
Security firm G4S confirmed it ran a call centre at HMP Oakwood in partnership with businesses and insisted it was entirely safe.
"All the prisoners are carefully security checked and interviewed before working in the centre, calls are made remotely by computer, and every conversation is closely monitored by supervisors," a spokesman said.
"No information from the calls is stored and there is no way any personal information can be used for any criminal purposes."
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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