"I believe this is very common practice, or at least it used to be, and is a wake-up call for board members that they have to be concerned about privacy. I think the problem is worse than reported and a lot of companies would be caught with their pants down, but HP was the first."

Ponemon added if the same surveillance technique were used in Australia it would violate the Privacy Act and said Australian privacy laws are more developed than those in the US.

The use of surveillance methods such as pretexting (a form of social engineering to gain access to another's personal telephone records) is common practice according to John Bracey, president of the Australian Institute of Private Detectives.

Bracey said private detectives have to support individual privacy concerns, and added gaining access to what is deemed private, personal information can give a fair trial in court to both parties.

"Asking a private detective not to use such surveillance methods (like pretexting) is like asking a carpenter to put cupboards up without using a hammer, nails, screws or a saw," Bracey said.