Jail sentences of up to two years are needed to combat the huge black market trade in details about people's private lives, says a government watchdog.
Richard Thomas says he is horrified at the scale of the problem
Information Commissioner Richard Thomas says there is a "pernicious" illegal trade in addresses, phone bills, bank statements and health records.
Celebrities are backing the campaign, but Mr Thomas said the trade posed a threat to "every citizen".
The government said it would review the current penalties in place.
INFORMATION PRICE LIST
Obtaining or checking an address: £17.50
Tracing addresses from a telephone number: £75
Vehicle check at DVLA: £150-200
Licence check: £250
Criminal records check: £500
Finding a person across a wide area: £60
Ex-directory search: £65-75
Mobile telephone account enquiries: £750
Source: Information commissioner's report case study
The information commissioner is so horrified that he has used his special powers under the Data Protection Act for the first time to deliver a report to Parliament on the problem.
Currently the penalty for illegally buying or selling personal information is only a fine - up to £5,000 in magistrates courts or unlimited in crown courts.
Mr Thomas said there is widespread abuse of the laws.
Journalists, financial institutions and local council debt collectors are among those paying private investigators and tracing agents for data, he said.
In one case, an agent working for finance houses and local councils was invoicing £120,000 a month to trace people.
And one Sunday newspaper journalist was billed more than £700 in a week for a range of searches.
The general secretary of the National Union of Journalists, Jeremy Dear, said: "We never condone obtaining information by criminal means or by impersonation except where there is an overwhelming public interest.
"However, it must be understood that there are times when a journalist must use exceptional means to investigate exceptionally important matters where all other methods have been exhausted, and he or she should not be punished for this if the public interest is clearly being served."
Mr Thomas said people cared about their privacy and their personal details should remain secure.
Broadcaster Chris Tarrant is backing tougher penalties
"Every citizen in this country is vulnerable to this, it's not just celebrities and sports stars and politicians," he told the BBC News website.
Intrusions into privacy could blight people's lives, he said.
"If you are a battered wife and have had to flee your home and go underground with a new address and an aggressive man comes after you, it's incredibly threatening and very distressing," he said.
Mr Thomas said it was "dispiriting" when prosecutions ended with a conditional discharge or a token fine.
There was a precedent in recently passed laws for introducing identity cards, which include a two-year prison term for people accessing information without permission.
He wants the government to replicate those penalties for people trading information from other sources.
And he is asking professional bodies in journalism, the security industry and private investigations to take action.
The move could stifle demand and tackle suppliers, he said.
His report, What Price Privacy?, gives a price list for black market sales of information, ranging from £17.50 for obtaining or checking an address to £750 for mobile phone account details.
It also details some of the ways the information is gleaned, with "blaggers" impersonating people to access their files.
Who Wants To Be A Millionaire? quiz show host Chris Tarrant welcomed the report, saying too many people's private lives were being invaded.
"My family has experienced intrusions into our daily life with strangers making nuisance calls to our supposedly ex-directory telephone number," he said.
Journalist and television presenter Fiona Philips also backed the proposals.
"I have experienced media intrusion into my home and family life which has caused long term effects for us all," she said.
"Whilst I am a member of the media and journalistic community myself, I feel there is a need to draw a line and I offer my support to this campaign to prevent the use of unlawfully obtained personal information."
The Department for Constitutional Affairs said it would work with the watchdog to review the current penalties.
A spokesman said: "As the government moves to an era of greater data sharing in a range of public services, it is essential for people to be confident that, where their personal data is shared, it will be secure and will not be wilfully or recklessly abused."