More than 140 complaints have been received by the Home Office and a private contractor over communications sent to suspected illegal immigrants.
A total of 39,100 text messages have been sent by Capita on behalf of the Government as part of a contract to track down a pool of about 58,800 individuals who may not have the right to live in the UK.
Between December 2012 and June this year, a total of 143 complaints were received in relation to texts and other communications, of which 14 were found to have been made in error.
The text message reads: "Message from the Home Office. Our records show that you may not have leave to remain in the UK. Please contact us on 0844 3754636 to discuss your case."
A Home Office spokesman said: "We are taking proactive steps to contact individuals who records show have no valid right to be in the UK, some of which date back to December 2008. We believe it is right to enforce the immigration rules.
"Out of thousands of people contacted by Capita, a small number have been found to have the right to be in the UK or an outstanding application. Anyone contacted in error has been asked to get in touch with Capita to update their records."
Earlier this year, the Home Office came under fire for using ads, displayed on billboards carried by vans in six London boroughs, reading "In the UK illegally? Go Home or face arrest."
David Hanson MP, Labour's shadow immigration minister, said: "These messages will rightly cause distress and offence to British citizens, many of whom have done much to contribute to our society.
"It is simply wrong for this sort of message to be sent by text, and to be so poorly targeted."
A spokeswoman for Capita said: "The number of complaints received to date about erroneous contact has been negligible. We do, of course, investigate all complaints thoroughly."
Home Secretary Theresa May last week unveiled the Government's highly-anticipated Immigration Bill, which will bring in measures to stop migrants abusing public services, deter illegal immigrants from coming to the UK and make it easier to remove people who should not be here.
Key measures in the Bill will see temporary migrants, such as overseas students, pay to access the NHS in an attempt to tackle so-called ''health tourism'', while the appeals process against deportation is to be streamlined.
Banks will be forced to carry out background checks to stop illegal immigrants opening accounts, while applicants for a driving licence would also have to prove they were in Britain legally.
The Opposition said the Bill would do nothing to tackle ''increasingly shambolic'' border controls, while campaigner Liberty said the new laws were a ''race relations nightmare waiting to happen''.
A Downing Street spokesman said: "The point of the texting, which the Prime Minister does agree with, is to get in touch with people who may be here illegally and to say to them... that they need to be considering going home voluntarily or being removed.
"The principle of the text message is correct. This is one of various means the Home Office uses to get in touch with people who are here illegally to bring about their removal from the UK.
"Capita are of the view that 14 text message have gone to people who shouldn't have had them. I think the percentage is much, much less than 0.001%. It's a tiny proportion of texts that may have gone to erroneous people and the wording of the text just says `you may be here illegally'.
"The point is to send a message to people who are here illegally that there are avenues to pursue to leave voluntarily, but if not the Home Office is looking for them and will bring about their removal."