BT has been given 100,000 IP addresses belonging to BT broadband customers suspected of illegally filesharing.
According to the BPI, which provided BT with the addresses, the ISP has not yet acted on the information.
Geoff Taylor, CEO of the BPI, told the Daily Mirror: "It's shameful for a company like BT to know that a high percentage of the traffic it carries is illegal material but do nothing. If you operate a commercial service and know it is being used to break the law, taking steps to ensure it is used legally is a cost of doing business."
BT revealed that it had agreed to send out letters to 1,000 suspected filesharers at the beginning of the year.
However BT says the BPI alerted them to more 21,000 cases of potential illegal downloads but less than two-thirds were correct IP addresses belonging to BT customers.
"Since none of the customers we wrote to during the trial were subsequently taken to court by the BPI, we don't know whether they were actually guilty of infringement," BT said.
The ISP also said to "investigate the exact nature of each case would involve an intrusive level of inspection of people's traffic and customers would rightly complain".
BT confirmed it had agreed to a 12-week trial of being alerted to illegal filesharers by the BPI – a deal which had been arranged by the government but the BPI continued to send IP addresses after the trial ended.
BT told PC Pro: "There was no agreement after the 12 weeks. There was supposed to be follow-up discussions over who should pay for enforcement in the future. That hasn't happened".
Taylor also slammed BT for exaggerating the cost tackling internet piracy will have on consumers.
Business Secretary Lord Mandelson is trying to push through a scheme to tackle illegal filesharers that was first detailed in the government's Digital Britain report, released earlier this year.
However, BT has estimated implementing the technology to track illegal downloaders and then contact them and implement a suspension is likely to cost around £1m a day.
BT's consumer division chief John Petter said that ISPs would not be able to swallow the entire cost, and would have to pass some of it on to consumers.
"This is just about BT protecting profits," Taylor added.
The government has been holding a consultation period with the music industry and ISPs, which ends today. This allowed them to voice their opinions and coincerns regarding the proposals on how to tackle illegal downloaders.
Charles Dunstone, CEO of TalkTalk said that while the ISP doesn't condone or encourage illegal filesharing, it feels the approach suggested by Lord Mandelson is "based on the principle of 'guilty until proven innocent' and substitutes proper judicial process for a kangaroo court".
"The unintended consequence of Mandelson's plan will be to encourage more Wi-Fi and PC hi-jacking and expose more innocent people to being penalised wrongfully," added Dunstone.
Dunstone also said TalkTalk would continue to resist any attempts to make it impose technical measures on its customers (unless directed to do so by a court or recognised tribunal).