The city of Amagasaki in Hyogo Prefecture, western Japan, has lost a USB device containing the personal information of more than 460,000 residents.
Municipal officials revealed on Thursday that a company worker lost the memory stick on Tuesday. The city had asked the firm to carry out the task of paying subsidies to households hard-hit by the coronavirus pandemic.
The device had the names, addresses and birthdates of all the city's residents, as well as how much local tax they paid and information on welfare benefits.
The worker reportedly put the information on the USB without the city's permission, and transferred the data at a call center in neighboring Osaka Prefecture.
The worker failed to delete the data afterwards, and is said to have misplaced the bag containing the memory stick while he was out drinking.
The loss was reported to the police and the city on Wednesday.
Municipal officials say the information cannot be accessed without a password, and no leakage of personal data has been confirmed so far.
They have apologized and vowed to tighten security management, while raising awareness about the importance of protecting personal information.