"Control and containment" rather than care are used in England's mental health hospitals, a damning report from the Care Quality Commission (CQC) said.
At last night's annual Mental Health Act report, CQC chief executive David Behan said he was concerned that hospitals have "allowed cultures to develop where control and containment are prioritised."
He said: "Our report has found too many instances where people have been restricted inappropriately."
Behan added that it is "unacceptable" for the situation to continue.
The CQC noted that some patients detained under the Mental Health Act did not know why they were detained.
It also found that none of the patients knew what they had to do to be released at one mental health hospital.
Analysis from the report found that since last year 5% more people were subject to the Mental Health Act.
And the number of people subject to community treatment orders rose by 10% since 2010/2011.
There were "legal irregularities" in 4% of patient records, which could mean that more than 180 patients were unlawfully detained.
CQC's report included information from the Mental Health Minimum Dataset (MHMDS), published by the Health and Social Care Information Centre (HSCIC).
HSCIC chief executive Tim Straughan said: "Without this data it is impossible to fully grasp what is actually happening on the ground – which therefore makes it impossible to address the needs of people in our society.
"We recognise how valuable our information is to CQC in helping them to monitor use of the Mental Health Act in England."
CQC maintained that some improvement was made since the last annual report, but services are under pressure from high bed occupancy and increased workloads.
Policy makers and commissioners have a "responsibility" to make a change in mental health provision, the CQC said.
Recent changes to the MHMDS could provide a "much richer" dataset to analyse the Mental Health Act, as The Commissioning Review reported earlier this week.