The Open Rights Group has published its concerns
Campaign body the Open Rights Group (ORG) has called for further detail on the workings of ad system Phorm.
BT, Virgin and Talk Talk have signed up to trial the system, which intercepts users' web surfing to analyse habits.
More than 2,500 people have signed a Downing Street petition expressing concern about privacy implications.
"Until we know exactly how Phorm works, and across whose networks our data will flow, speculation about the privacy implications will continue", said ORG.
Some campaigners believe there are unanswered questions about how Phorm works, following a number of question and answer sessions the company has done publicly and with the media.
In a statement ORG said: "Question marks are beginning to appear over Phorm's compliance with the law.
"Can ISPs' employment of Phorm comply with the Data Protection Act? Is intercepting traffic in this manner an offence under section 1 of Ripa (the Regulation of Investigatory Powers Act)?"
There is concern that the interception of users web surfing data may contravene Ripa, which makes the interception of any transmission across a public telecommunication system illegal without the explicit consent of users.
A Home Office internal review of Phorm's legal standing, which was e-mailed to a security website, seemed to suggest that the interception of people's web surfing habits was legal as long as users had given their consent, which also included agreeing to new terms and conditions.
Talk Talk has said it intends to make Phorm an opt-in system, while the two other ISPs have not yet decided.
BT has said that the terms and conditions for broadband users who use Phorm will be updated but some privacy campaigners argue this does not equate to informed consent.
In response to the debate Phorm issued the following statement.
"Our technology complies with the Data Protection Act, RIPA and other applicable UK laws. Consumers are in control - they can switch the service off or on.
Meanwhile the system doesn't know who they are or where they've browsed as it doesn't gather personally identifiable information, doesn't store IP addresses or retain browsing histories," the statement read.
We are currently in conversation with the Open Rights Group to meet with them and look forward to explaining how our technology sets a new standard in online privacy."