University of Wollongong Professor and Vice-Chair of the Australian Privacy Foundation, Dr Katina Michael, says that vital pieces of information are being sent to places that we have no control over.
"It's costing us our privacy," she says.
"There is a value attached to information and we must understand that... all that general value that you perceive you're gaining, you're actually losing."
Coles revealed that customers using a Coles Flybuys card are having their data shared with up to 30 different organisations owned by Westfarmers and with third parties in 23 other countries.
Information shared includes an individuals name, personal contact details, household details and transaction history as well as their buying behaviour and interests.
Dr Michael says that organisations should not only release their privacy policies but disclose specific information about where the data is going.
"Consumers should be asking, who are their alliances, who are their partners, who are they selling our private information to and what is the value of this information?"
Countries that Coles have named include the United States, Mexico, South Africa and Argentina as well as countries in Asia, Europe and the Middle East.
"This is vital information about individuals in Australia that is being sent to countries that we really don't have much control over in terms of breaches," she says.
"They do not declare if our data has been compromised... these countries that lack privacy laws and principles can go about their business and not declare that a security breach has occurred with your data."