Bell is going beyond its role as a provider of telecom services, according to the Public Interest Advocacy Centre and the Consumers' Association of Canada.
"What you're paying for is an uninterrupted telecom service, not for an ad-based service supported by behavioural targeting, which is the Facebook-Google model," lawyer John Lawford of the Public Interest Advocacy Centre said Monday.
The consumer groups have filed a complaint with the Canadian Radio-television and Telecommunications Commission, describing the practice as an abuse of privacy. They want Bell to be ordered to stop collecting the data.
The CRTC said it was studying the complaint and wouldn't comment further.
The Office of the Privacy Commissioner of Canada said Monday that it has received more than 150 complaints about Bell's data collection.
It is investigating whether collecting this data is compliant with the Personal Information Protection and Electronic Documents Act, the federal law which covers the collection, use and disclosure of information in commercial activities.
Bell (TSX:BCE) said its data collection program isn't breaking any federal telecom rules or privacy guidelines and noted that customers can opt out at any time.
"Because customers would receive random online advertising in any event, they won't actually be seeing more ads, but they will see ads of greater interest to them," Bell spokesman Jason Laszlo said in an email.
Laszlo also said Bell could segment a large group of customers to advertisers who are interested in gaming, for example, but the advertisers wouldn't see any specific details about the customers.
Bell said it expects to expand the program it to other customers in the future, which could include its Internet and TV subscribers.
The telecom giant announced last fall that it would collect consumers' data to put targeted ads on mobile devices to be able to compete with search engine Google and social network site Facebook, which offer ads to consumers based on their interests.
But Lawford said he believes the opt-out rate for Bell customers would be low, adding it's usually well under 10 per cent in these kinds of circumstances.
"They catch all of the people who have too many other things to do with their life," he said from Ottawa.
Lawford said Bell will still be collecting data on customers who have opted out of the program, but they won't be sent targeted ads based on their behaviour. Instead, the information will be used for customer profiles and marketing reports that could be sold to third parties.
Bell will end up with a huge data base that can be subject to breaches, loss or theft, he added.
It's going to get "messy" if it's hacked or if Bell gives access to domestic surveillance agencies such as the Canadian Security Intelligence Service (CSIS) or the U.S.-based National Security Agency, said Lawford, the organization's executive director.
The NSA's surveillance programs have scooped up phone data from millions of American users and President Barack Obama has said he will place limits on the way the intelligence community accesses phone records.
In the U.S., big telecoms Verizon and AT&T also allow their customers to opt-out of data sharing. But critics have said that even with personal identities stripped out, the information still can be sold to third parties who would get a profile of customers' habits and interests.
Rogers also has a program for its customers to sign up for text messages that will alert them to deals when they are near specific retailers.