The service has been criticised by privacy watchers A website set up to allow the public to report crime seen via CCTV footage has been forced to make significant changes to the way it operates.Internet Eyes offers rewards of up to ?1000 for crimes such as shoplifting seen via live CCTV footage streamed to the homes of members.
The Information Commissioner's Office (ICO) demanded changes after footage from the service was found on YouTube.
Images transferred over the internet must now be encrypted.
The firm must also carry out checks on registered viewers and audit which viewers are watching which clips.
By July the firm must also ensure that no viewer can access footage from cameras located within a 30 mile radius of the viewer's location.
"CCTV footage should not end up on YouTube when it shows someone simply out doing their shopping. A person's CCTV image is their personal data," said ICO deputy commissioner David Smith.
The ICO investigated the firm after a complaint that footage was available on YouTube.
On 18 May, Internet Eyes agreed to make the changes.
"We are now satisfied that they have met our requirements. We will continue to keep a close watch on them and do not rule out taking more formal enforcement action if further complaints are received," Mr Smith added.
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