Hampshire police have earned £120,000 over the last five years by giving car crash victims flyers for a claims company.
The force was paid £24,000 per year over a five-year period by private firm Car Call UK.
One motorist who received the flyer became concerned that their details might be being sold on, and their complaint sparked an investigation.
It found that a chief inspector who had been responsible for introducing the scheme had later joined the company. Several other ex-officers had also joined the Havant-based firm.
A two-year probe found that officers had felt uncomfortable handing the flyers out, while drivers had thought police were endorsing the company.
The deal, which had been sanctioned by the now-defunct Hampshire Police Authority, has been cancelled.
The report said that the scheme relied "on police interaction with the public at a point of vulnerability" to "sell" the claims firm's services.
The Sun reports that one local said: "Next the ambulance service will give out funeral plans to passengers in the back of the ambulance, the fire brigade will probably give you the business card of a local decorator as they are hosing down the flames of your burning house."
"Following review of the ethical committee's observations, I took my decision to give notice and end the agreement with Car Call."
Car Call UK's managing director Gavin Little refused The Sun's request for comment.