Security firm G4S has insisted there is no risk of inmates paid to gather insurance details from members of the public at call centres using the information for criminal purposes.
The Ministry of Justice (MoJ) confirmed prisoners are working as call centre operatives at HMP Oakwood in Wolverhampton, which is run privately by the company, and HMP Drake Hall in Staffordshire.
The Sun said the inmates telephone householders and ask them about their financial details on behalf of market research companies.
A G4S spokeswoman said: "The call centre at HMP Oakwood is one of many partnerships we run with businesses, and enables prisoners to work towards apprenticeships and industry-recognised qualifications.
"All the prisoners are carefully security checked and interviewed before working in the centre, calls are made remotely by computer, and every conversation is closely monitored by supervisors.
"No information from the calls is stored and there is no way any personal information can be used for any criminal purposes."
The MoJ said the prisoners making the calls are supervised and recorded. They are not allowed to take in writing material and do not have access to the internet at the centres. Inmates follow a script during calls and are not required to ask members of the public about their valuables.
An MoJ spokeswoman said: "All prisoners working in call centres are risk assessed and stringent security measures are in place, with calls supervised and recorded.
"At no point can they ask the value of items, record data outside of the secure systems or deviate from a carefully worded script. These small pilots are being carefully monitored and would only be rolled out if deemed to be successful," she said.
"It is crucial that offenders do not sit idle in their cells. Ensuring prisoners learn new skills through work opportunities makes them more employable in the future - that means a lower risk of reoffending, lower crime and fewer victims."