Canada's privacy commissioner says Bell should have asked for express consent from its customers before beginning a data collection program that involves tracking their internet searches, app usage and TV watching habits so they can be sent targeted advertising.

Privacy Commissioner Daniel Therrien issued a report Tuesday highlighting a "significant impact on privacy" from the Bell program, which began Nov. 16, 2014, and has drawn 170 complaints from consumers.

Bell's plan is to build detailed profiles of its customers by tracking their app usage, TV viewing, calling patterns and even GPS positions. The company could then combine this information with account data to allow third parties to send ads to their customers.

It has begun profiles on its millions of cellphone customers, but had plans to extend the tracking to landlines and TV viewing.

The privacy commission said Bell had refused its request to adopt an "opt-in" consent policy for the program, so that customers would be able to choose whether they want to have their data tracked.

However, the telecom giant seemingly made an about-face Tuesday just hours after the privacy commissioner issued its report.

"Bell will abide by the privacy commission's decision, including the opt-in approach," Bell said in an email to The Canadian Press. "We're dedicated to protecting customer privacy and thank the commission for clarifying the rules."

Vast amounts of personal info

The privacy commissioner warned that the company may be violating privacy rules.

"Bell's ad program involves the use of vast amounts of its customers' personal information, some of it highly sensitive," Therrien said in a news release.

"Bell should not simply assume that, unless they proactively speak up to the contrary, customers are consenting to have their personal information used in this new way."

The telco previously put the onus on customers to "opt out" if they do not want their data tracked. It was also keeping profiles of customers who had opted out, hoping that in future it would be able to use the information, the privacy commissioner found.

Opting out involves clicking on a link at the bottom of the program's web page and following the prompts. Customers who do not take this step are automatically included in the program.

The privacy commissioner was able to get Bell to agree to stop keeping a database on customers who had opted out and to delete information it had on file.

'Stop passing on credit info'

Bell also agreed to:

Include language in its contracts with advertisers to prevent them from using cookies, device fingerprinting, other tracking methods and profile information to identify customers' personal information.

Stop including credit score information in its customer profiles that go to advertisers.

Use partial postal codes, instead of full postal codes, to deliver targeted ads.

Not allow access to the data to The Source, a retail electronics store owned by Bell.

When Bell announced it would introduce the data collection program, Micheal Vonn, policy director at the B.C. Civil Liberties Union, described the targeted-ad system as part of "a disturbing trend" by internet and telecom companies.

Google and Facebook are also taking steps to capitalize on data about the behaviour of their customers.

But companies such as Bell have unprecedented access to information, since they control wireless and telecom access, as well as TV and internet usage.

The Public Interest Advocacy Group (PIAC), which complained about Bell's practices to the CRTC and the privacy commissioner, welcomed the recommendation that Bell should seek consent from customers to allow data collection.

"There is no question that what Bell is doing, and how Bell is doing it, is inappropriate, and today's findings recognize that," said John Lawford, the group's executive director.

The lawfulness of Bell's conduct under telecommunications law is still before the federal telecom regulator, which could force the company to ask each customer to opt into the ad plan.