Greater Manchester Police has been fined £120,000 following the theft of a memory stick containing names of members of the public who gave statements in drug probes.
The unencrypted device with no password protection was stolen from an officer's home and had details of 1,075 people with links to serious crime investigations stored over an 11-year-period.
The USB drive, belonging to the GMP drugs squad detective, is also understood to have included details of police operations, potential targets for arrest and names of officers.
It has not been recovered following the burglary at his home in July 2011 when his wallet, containing the stick, and his car keys were taken from his kitchen table.
The Information Commissioner's Office (ICO) said the consequences of the security breach "send a shiver down the spine".
In a report, ICO director of data protection David Smith said: "In this particular case the data subjects would suffer from substantial distress knowing their sensitive personal data may be disclosed to third parties even though, so far as the commissioner is aware, those concerns have not so far materialised.
"If the data has in fact been accessed by untrustworthy third parties then it is likely that the contravention would cause further substantial damage to the data subjects such as exposing physical harm."
A similar security breach took place at GMP in September 2010 but the force failed to comply with a direction to order all staff to use encrypted memory sticks.
A civil monetary penalty of £150,000 under the Data Protection Act was imposed by the ICO for the latest incident, which was reduced by 20% to £120,000 as the force took advantage of an early payment discount. A further 1,100 memory sticks were recovered by the force when it offered an amnesty to staff with personal or unencrypted devices to hand them in.
It is understood the detective was internally disciplined and that all those whose names appeared on the device have been contacted.