It has been claimed that the National Security Agency in the US has collected up to 200 million text messages a day from across the world.
In a joint investigation by The Guardian Newspaper in the UK and Channel Four news, who have seen a classified April 2011 presentation which they say shows that the text messages were being used to gain access to details such as location, contact networks and credit card details.
Documents from the UK's spy agency, GCHQ, also shows that the NSA collected "everything it could" rather than focusing on individuals who were already under surveillance.
The NSA came under fire last October after it emerged that the phones of top world leaders, including German Chancellor Angela Merkel, were being monitored.
British spies were also able to look at texts scooped up in the secret operation, according to the latest leak from former US spy Edward Snowden.
The NSA created a secret database called Dishfire which stored messages for future use and British spies, who face tough British laws, have been given a back door to exploit that information, it was claimed.
Dishfire traces people when take their mobile phone abroad by capturing the welcome text message from your phone company that is triggered by your arrival overseas, telling agents where you were and when you got there.
It is claimed the texts help the NSA to track people’s whereabouts, their contacts, their banking details and their movements if they travelled from country to country.
Under US law, the American spies had to delete the data for its own citizens but texts coming to and from international mobile phones could be spied upon at will.
Communications giant Vodafone told Channel 4 News they were “shocked and surprised” by this potential for exploitation while former Interception Commissioner Sir Swinton Thomas said he would have been concerned about this kind of use of foreign intelligence agency data.
“What you’re describing sounds concerning to us because the regime that we are required to comply with is very clear and we will only disclose information to governments where we are legally compelled to do so, won’t go beyond the law and comply with due process,” Stephen Deadman, group privacy officer and head of legal for privacy, security and content standards at Vodafone Group, told Channel 4 News.
“But what you’re describing is something that sounds as if that’s been circumvented. And for us as a business this is anathema because our whole business is founded on protecting privacy as a fundamental imperative.
“We’re going to be contacting the [British] government and are going to be challenging them on this. From our perspective, the law is there to protect our customers and it doesn’t sound as if that is what is necessarily happening.”
Describing it as “a worry” Mr Thomas noted: “Certainly in my time I would take the view that it not open to our intelligence services to obtain or certainly to use communications or data which would not have been lawful in this country.
“It’s not dissimilar to the question of whether you use material which you may have reason to believe has been obtained by torture. It’s a different area of course, but the concept is very similar.”
The NSA has stated that Dishfire does exist and that it lawfully collects SMS data. It also stated that privacy protections are in place for US citizens, according to Channel 4 News.
GCHQ said: “All of GCHQ’s work is carried out in accordance with the strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate and that there is rigorous oversight.”
Mr Snowden, is a former NSA contractor, who is now hiding in Russia after leaking classified government documents.
He has become a hero for civil liberty campaigners in Europe and the US for whistleblowing about the reach of surveillance activities by the US, including on its closest allies.