(FORTUNE Magazine) – How much spying does your company do--and how much will it admit to? A letter in the Nov. 12 issue of FORTUNE from Squeamish in Seattle, whose boss wanted him to gather product information from competitors by posing as a potential reseller, brought a flood of mail, and, according to a sizable minority, there's nothing unusual about the practice. One reader, Eyes Wide Open, says that at a technical training company where he worked, it was common practice to make "exploratory cold calls to our competitors, pretending to be naive customers. Now when I receive 'blind' customer calls, I always wonder who I'm really talking to." He and several other readers described past and current employers' full-blown spy operations, complete with what the Nixon White House used to call plausible deniability: fake company names, cloaked 800 numbers, fictitious Websites, the works. "We rely on this resource," says one correspondent, "but it's not listed in our company directory and can't be traced back to us."

Yet, according to most of you, this cloak-and-dagger stuff is not just unethical, it's unnecessary. On the first point, the Society for Competitive Intelligence Professionals (www.scip.org) has a code of ethics that forbids gathering data under false pretenses. Moreover, writes a market-intelligence expert at a consumer electronics company, lying about one's identity "conflicts with the U.S. Economic Espionage Act of 1996...and can bring public embarrassment and lawsuits to your company. The irony is that most of the information Squeamish's boss seeks can be obtained through overt means," such as networking with rivals at trade shows and symposiums, or schmoozing with customers and suppliers. "Squeamish needs to educate his boss," agrees Rick from Ontario. "So many software-analyst firms follow his competitors, I find it hard to believe that the information he's seeking isn't already out there." For a comprehensive course in aboveboard research methods, suggests reader Michael Schalit, read Competitive Intelligence: How to Gather, Analyze, and Use Information to Move Your Business to the Top by Larry Kahane (Simon & Schuster, $13).

If it's immoral (and at times illegal) to coax info out of a competitor by claiming to be someone you're not, what about calling up and asking questions without identifying yourself at all? "You'd be surprised how many people will start talking," notes Charlotte Sibley, vp of global business research at Pharmacia. "With a skilled questioner, many people aren't fully aware of what they're revealing." She adds: "However, this is a dubious practice--a sin of omission, if you will. To avoid it, most companies hire a third party to gather information on a double-blind basis." A consultant from Texas recalls using an outside research firm on behalf of a client who made medical devices: "The firm we hired simply called management at Company X and explained that they were investigating the market for one of Company X's competitors. Flattered to have been recognized as a market leader, the managers sang like birds."

Many thanks to the dozens who admitted learning straightforwardness the hard way: by making fools of themselves. When handed the same request from above that Squeamish faced, some people called competitors posing as representatives of real companies they thought would make credible potential customers. Unfortunately, many of these companies were in fact already customers, and well known to the folks on the phone. "Imagine my embarrassment when [the competitor] let me go on and on pretending to work for someone else, and then said, 'So how's so-and-so?' referring to a manager who, I later found out, had just been out having major surgery," recalls one reformed spy.

The sadder-but-wiser among you urge Squeamish not to let his boss push him around: "If Squeamish's boss lacks the backbone to undertake this scheme himself, you can bet he'll back away when things go wrong and tell everyone it was Squeamish's own idea and undertaking," says someone who's been there. "Squeamish will be left with a questionable reputation." Right out of college and working as a research associate for a Big Five consulting firm, another correspondent reported to a managing director who persuaded him to get information on certain dot-coms by posing as a student writing a term paper. His lie was discovered by higher-ups, he got into trouble, and his boss left him to twist in the wind. What he learned: "You are responsible for your own actions, whether or not someone more senior tells you to take them. In the end it was I, not the person who told me to lie, who bore the responsibility, and it was I who was reprimanded."

Many of you suggested that Squeamish find a new boss. "I have a very simple rule about bosses," writes a reader named Scott Lowry. "I don't lie to them. And I don't lie for them."

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