A landmark ruling could lead to parking tickets issued based on evidence from camera cars scrapped.
Smart cars with periscope-mounted cameras have become increasingly popular among councils for monitoring areas with restricted parking.
However, a driver who appealed against the penalties because there were no warnings that cameras were in operation has had her fines quashed at a tribunal.
Now it's believed that her courtroom victory could pave the way for other motorists to have penalties scrapped.
Rachel Johnson, from Merseyside, took her case to the Traffic Penalty Tribunal, where an adjudicator ruled the penalties were invalid because there were no warnings of cameras being in use when the alleged offences were recorded.
It is a legal requirement for warning notices, saying 'camera enforcement in operation', to be displayed in order for a parking penalty to be valid.
Johnson, who runs an off licence in New Brighton, said she decided to challenge Wirral Borough Council after getting three parking tickets in a week.
She said: "It was outrageous. The car was parked for no longer than ten minutes outside our shop, which is legitimate practice when dropping off cash or delivering heavy loads.
"It is absolutely disgusting that the council are using such sneaky tactics to issue fines. There should be clear signs notifying motorists that cameras are in operation.
"I certainly did not notice the spy camera, it must have been parked some distance away, They are operating like prowlers, lying in wait.
"The letter I received back from the adjudicator stipulated that local authorities should use the spy camera system "sparingly" and only in areas where wardens cannot be used.
"These spy camera cars are an alarming invasion of privacy and smack of a way to raise money."
The tribunal ruled that Smart cars fitted with periscope cameras should have warning notices whilst in operation
A Wirral Borough Council spokeswoman said: "Anyone who has received a parking ticket and thinks that they have a valid reason to appeal is able to do so through the appeals process."