A council mistakenly sent more than 1,600 "alarming" debt collection letters to allotment holders.
Sheffield Council said the error happened because it employed a debt recovery agency to help with a backlog of fines on hold since March.
It admitted the plan backfired after people were panicked by the debt agency headed letters.
Councillor Terry Fox has now "personally apologised" for the distress and worry caused.
Altogether, 1,639 letters were sent from debt recovery agency PS&P in October - many to people who had already paid bills.
Ann Bilton, who has had a plot on Morley Street in Sheffield for more than 20 years, was one of the tenants to receive a letter.
"I can see why people panicked," she said.
"This letter came with the debt agency logo at the top rather than the council, it didn't even specify what it was for, basically 'you owe the council money'."
The council had paused all debt collections because of coronavirus and said it had "good intentions" in asking debt collectors for help with unpaid bills to "alleviate financial pressure".
Mr Fox said: "Firstly I want to personally apologise for any distress or worry caused by the reminder letters sent to allotment holders who had already paid their invoice.
"I also want to reassure all those affected that they are not facing debt collection action, their credit rating or allotment tenancy is not affected by the reminder letter, and their personal data has not been compromised."
He added that alarming people was "the last thing" he wanted.