Controversial crime-spotting website Internet Eyes has upset the Information Commissioner's Office (ICO) after CCTV footage of a member of the public out shopping was posted on YouTube.

The ICO has now demanded that the company make extensive changes to its systems after a privacy complaint was made by the individual concerned earlier this year.

Internet eyes has since agreed to encrypt all surveillance traffic, make better checks on people signing up to undertake the work, and put in place an audit trail to deter abuses. The company will also have to stop its viewers from accessing footage from postcodes within 30 miles of their home addresses.

Internet Eyes launched in 2009 with the promise it would pay Internet users to watch CCTV images streamed from a variety of locations such as shops and UK streets, reporting any criminal activity noticed. Retailers are charged for the service which is mainly aimed at deterring shoplifting.

The ICO said that so far it was satisfied that the company had put in place checks to stop the sort of abuse complained about but its patience with the company's 'Big Brother' business is clearly starting to wear thin.

"CCTV footage should not end up on YouTube when it shows someone simply out doing their shopping. A person's CCTV image is their personal data," said deputy Information Commissioner, Dave Smith.

"We will though continue to keep a close watch on them and do not rule out taking more formal enforcement action if further complaints are received," read an ICO statement.

This is not the firm's first brush with negative publicity, including one shop in East Anglia that decided to stop using the site after complaints from members of the public. Privacy campaigners naturally hate the site on the grounds that its business concept is a data protection disaster waiting to happen, while some people 'working' for the site moan about the low returns for the work put in.

The site will point out that the ICO has so far received only one complaint about its activities.

The full text of the undertaking issued to Internet Eyes by the ICO can be read on the latter's website.