According to reports, customers disconnected by the provider have been sent a formal notification, and must sign a document admitting guilt and promising not to do it again in order to be reconnected.
Users continuing to illegally share and download content could face permanent disconnection after a third violation.
The move has been slammed by the Open Rights Group (ORG), an organisation set up to preserve and promote 'digital rights'. The group pointed out that there is no legal procedure or right of appeal taking place, and that there are no other telecoms companies in Hull, limiting the option of moving to another provider.
"People are being found guilty by a Kang-Karoo court," said Jim Killock, executive director of the ORG.
"Internet access is crucial for freedom of expression in the digital age. It's also how people do business and gain an education. A monopoly like Karoo cannot be allowed to arbitrarily decide when to limit our fundamental rights. Only courts can do that."