Subscribers to Internet Eyes watch CCTV footage from shops and report criminals in order to earn cash rewards.
Some people feel the idea encourages people to spy on one another.
"What we don't want is vigilante bounty hunters,” Sky News
quoted James Welch, legal director at the civil rights group Liberty.
"We're all responsible citizens - if we see a crime we should report it to the police.
"We shouldn't be paying people to watch out for crimes. It should be done by proper professionals."
Although there are currently many surveillance cameras in use, there is often no-one watching the footage.
"All we're doing is trying to reduce shoplifting,” Internet Eyes' boss Tony Morgan told Sky News
. “There are no voyeuristic opportunities to be had."
People will not be able to watch footage from the area where they live and they must be over the age of 18.
reports that: "Shoplifting is at its highest recorded levels, £4.88 billion a year according to the Centre for Retail Research. Internet Eyes has been designed to combat this rise by detecting these crimes as they happen."
It is hoped the website will also act as deterrent to criminals.