Walmart has just admitted that it uses a controversial face recognition software to help it catch thieves. The software scans the faces of all the shoppers entering, identifies suspected shoplifters, and instantly alerts store personnel on mobile devices.

This kind of technology is by no means new. It has been around for years but the current level of sophistication of the Walmart system has raised questions on shopper privacy. The debate is still ongoing on whether rules must be set when using this technology, Fortune reported.

FaceFirst, a company that provides retailers with facial recognition technology, supplies to Fortune 500 companies but declined to identify them. CEO Joe Rosenkrantz said, "The system is smart enough to notify a loss prevention associate on their iPhone within seven seconds."

The notification includes a profile of the suspect and a "corporate directive" on the proper response of store personnel. Security can simply approach the suspect in the aisles and confront them.

FaceFirst generally does not save photo records of the people it scans. What it does, however, is check against current databases of alleged offenders. Images of suspected offenders who have been previously caught and the people who look like them are retained in the system. The images of all other shoppers are discarded.

The use of this technology is kept mum by many retailers. For instance, Home Depot says it denies use of FaceFirst software. Walgreens also said that they are not in contact with the company. Target, however, was ambiguous and would not confirm or deny use of FaceFirst.

Several high-profile cases involving ownership of faces have been reported. A good example is the class action suit filed by consumers in Illinois against Facebook and photo service Shutterfly for violations of biometrics laws. In Europe and Canada, automatic face tagging are unavailable because of privacy issues.

"The whole issue of facial recognition and biometrics has been discussed for a while, and there's no consensus of how the privacy structure should work," says Jeffrey Neuburger, a privacy lawyer at Proskauer in New York.

The Walmart facial recognition system has since been discontinued and was only used in an experiment over the course of a few months, The Daily Mail reported.