MPs have been deluged with protests from low-income families that an American company hired by HM Revenue and Customs to root out tax credit cheats are wrongly cutting their payments.
Ministers face demands to tear up the contract with Concentrix, and MPs will press for an emergency debate in the Commons this week.
Frank Field, the chairman of the work and pensions select committee, said: “Decent people’s lives have been turned upside down as a result of Concentrix stopping their claim.”
The company, which is part of a multi-billion pound business services group, secured its contract when HMRC outsourced fraud and error detection.Critics have alleged that staff are under pressure to open large numbers of new tax credit investigations every day and cut corners in double-checking claims. They allege that families facing sanctions have to gather large numbers of documents to correct mistakes, and MPs trying to intervene on their behalf find it difficult to contact the company.
In one case passed to i , a Dundee woman was told she had incorrectly claimed as a single mother as she had a partner. Concentrix had investigated the wrong address. Before the mistake was rectified she lost her home.
In another, a claimant from Merseyside lost her credits while in hospital giving birth. She was told she did not live alone, even though the person cites lived elsewhere.
Mr Field said the cases he had encountered raised the “troubling prospect of large numbers of low-paid families being left penniless for weeks and weeks and weeks as a result of Concentrix’s actions”. He told i : “It has become a recruiting sergeant for food banks.”
He called for an inquiry into the company’s performance by the Treasury, which oversees HMRC, and the Department for Work and Pensions.