The physical principle is that they detect the leakage from the local oscillator in the superheterodyne receiver circuit.
I very much doubt that they exist now, if they ever did. It just isn't cost efficient compared to sending out letters and low paid inspectors who peer through windows looking for people watching TV.
The only means I know of for one to reliably detect the image on the screen would be TEMPEST style attacks [1]. I doubt that Capita can afford to buy the necessary equipment, or even views it as economically viable given the volume of letters they sent out - 56 million letters were sent in 2009, for example [2].
I'm not sure if modern TVs will even emit anything obvious since the connection from the decoder to the panel is covered in EMI shielding.
Several times in the past I have looked up information on them, and all I find seems to be in the realm of urban legend -slash- marketing ploy.
What is the physical principle behind this tech? Does anyone have reliable information?