Choice has asked the Office of the Australian Information Commissioner (OAIC) to investigate Kmart for 'potential' breaches of the Privacy Act.
Bunnings, Kmart and The Good Guys have been using facial recognition technology in a bid to crack down on theft in-store, research by Choice revealed this month.
Acording to the consumer group, it asked 25 of Australia’s largest retailers whether they were using facial recognition technology and examined their privacy policies.
Based on that investigation, it was claimed that only the three appeared to be using the technology.
In a letter to the Commissioner, Choice stated it was concerned that the retailers' practices pose "significant risks" to individuals.
"Choice is concerned that the retailers’ practices related to their use of facial recognition technology pose significant risks to individual," the letter said.
"The social and economic risks include invasion of privacy, misidentification, discrimination, profiling and exclusion, as well as vulnerability to cybercrime through data breaches and identity theft."
Choice has concerns with the retailers' practices for two main reasons: notice and consent, alongside alleged privacy harms to individuals.
The retailers' use of online privacy policies and small store signage to alert customers was described as "insufficient and non-compliant."
Meanwhile, Choice claimed the stated business purpose for the technology is disproportionate to the privacy harms posed to individuals.
"The retailers' large scale collection and use of their customers' sensitive information significantly invades the privacy of its customers," Choice wrote. "It is a disproportionate response to the risk of theft and anti-social behaviour in stores."