The number of Christchurch residents spied on while trying to get their insurance claims settled after the quakes could be in the hundreds.
Newshub revealed $180,000 of taxpayer money was paid to private investigators Thompson and Clark over three years to snoop on homeowners upset with Government-owned insurer Southern Response.
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They include Cam Preston, who was deemed by Thompson and Clark to be a "threat" and potentially capable of murder.
But Newshub national correspondent Patrick Gower, who broke the story, told The AM Show on Thursday he could be just one of hundreds in Thompson and Clark's sights.
"Anyone who was on Facebook talking about their insurance claims and the way they were being dealt with by Southern Response may have been snooped on, on there.
"There are potentially hundreds of people who are waking up today to find out they have been snooped on, spied and observed, followed potentially, or even infiltrated by undercover agents."
Mr Preston, whose claim has now been settled, joined The AM Show to discuss Southern Response's handling of his and others' claims. After being vocal has organised protests and attended meetings with the aim of launching a class-action suit against the insurer.
"It's possible Thompson and Clark had agents in those meetings observing, taking notes, recording those people," said Gower.
"He was a troublemaker, yes he was a stirrer... What Southern Response called him is a threat - they actually described him as a potential killer."
Southern Response told Newshub it was "acting in response to an escalating level of threatening and aggressive behaviour and communications from customers towards staff".
Commissioner Peter Hughes says the material he's seen raises questions about compliance and standards of integrity.
Ms Woods said she's wasn't sure what to feel about what's happened.
"I don't know. What we need to do is find answers to those questions. That's why the appropriate course of action is for the State Services Commissioner to go in and provide some answers."
Gower suggested the Government may need to outsource the investigation to a more independent body, but however it's run, it needs to move fast.
"Are they going and getting information off Thompson and Clark... before they destroy it?"
The AM Show with Duncan Garner, Amanda Gillies and Mark Richardson, weekdays 6-9am on RadioLIVE and streaming live to the rova app on Android and iPhone.