The Metropolitan police’s list of gang suspects breached data protection laws, potentially causing damage and distress to a disproportionate number of young black men, an investigation by the Information Commissioner’s Office (ICO) has found.

The list, called the gangs violence matrix, has also been criticised by human rights campaigners, who say it racialises the war on gangs and stigmatises black youngsters.

The ICO investigation found that the gang matrix failed to distinguish between victims of crime and offenders; some boroughs operated informal lists of people who no longer met the criteria for being on the matrix; and data was inappropriately shared with other public bodies.

The strategy appears to have included a significant number of individuals who did not pose a danger of committing violence. In one London borough, the Guardian found that 40% of young people on a list had “zero” risk of causing harm.

In a blogpost, Elizabeth Denham, the information commissioner, warned that the Met risked alienating the communities it is meant to serve. Denham noted that people should not fear that by engaging with the police their personal information could be shared inappropriately, which could damage their chances of getting housing or a job.

Elizabeth Denham, the information commissioner. Photograph: ICO press office/PA

The deputy information commissioner of operations, James Dipple-Johnstone, said: “Protecting the public from violent crime is an important mission and we recognise the unique challenges the MPS [Metropolitan police] faces in tackling this.

“Our aim is not to prevent this vital work, nor are we saying that the use of a database in this context is not appropriate; we need to ensure that there are suitable policies and processes in place and that these are followed.”

The gangs matrix has a range of personal data, including full names, dates of birth, home addresses, and information on whether someone is a prolific firearms offender or knife carrier.

Amnesty International welcomed the findings of the ICO investigation. Tanya O’Carroll, Amnesty International’s technology director, said: “The investigation by the Information Commissioner’s Office confirms a lot of our own findings into the gangs matrix: namely, that it is currently not fit for purpose.

“As the ICO state, the absence of effective central governance has risked causing damage and distress to many people – mainly young, black men – who are on the gangs matrix.”

Amnesty has called for the gangs matrix to be dismantled if it cannot be brought into line with international human rights standards.

The Met said it accepted the findings outlined in the investigation and was working to address them.

The deputy assistant commissioner for Met operations, Duncan Ball, said: “As well as addressing the concerns within the ICO report, we are also taking forward additional work including the introduction of a public-facing website to explain the legal framework for the gangs matrix and further information to improve public confidence and transparency.”

The ICO has released a number of recommendations, which include improving guidance to explain what constitutes a gang member, erasing any informal lists of people, ensuring people’s data is clearly identified to distinguish between victims of crime and suspects.

The ICO issued an enforcement notice, which compels the Met to comply with data protection laws in future and has given them six months to make these changes.

A Liberty spokesperson said: “The gangs matrix was always a poorly-designed and biased scheme carrying huge repercussions for those on it, 87% of whom are from black and ethnic minority communities.

“Today’s finding by the ICO shows the extent of the mess - how victims were confused with perpetrators, and the innocent remained under suspicion.

“This is a wake-up call for the Met, who must now consider whether the matrix has any place in legitimate policing.