A benefit claimant has told the BBC she is still suffering as a result of having her payments wrongly blocked by the US contractor Concentrix.
Two months after HM Customs and Revenue (HMRC) terminated its contract with the firm, the mother has described how she has been forced into debt as a result.
Meanwhile a report has said that 35,000 people had payments wrongly stopped.
The National Audit Office (NAO) also said that, so far, nearly £87,000 has been handed out in compensation.
Marie Crowley told the BBC’s Victoria Derbyshire programme that she had had to take out payday loans to cover her debts, after HMRC blocked her child tax credits of £150 a week back in September 2016.
However, when the tax authorities agreed to repay it, they said she could not have a lump sum. Instead the payments would be spread over the rest of the tax year.
Because her weekly income then went up, she was unable to claim housing benefit.
“The response I got, really, was: ‘well, you have got your money back, so don’t complain’,” she said.
As a result, she is having difficulty repaying payday loans.
“I am stressing about paying debts, and having to ring debt companies as they are chasing me about direct debits.”
Worry and distress
In just over two years, 108,000 people had their tax credits changed or stopped by Concentrix, according to the NAO report.
But almost a third of those decisions had subsequently been overturned, it said.
By mid-December 2016, “HMRC had paid a total of £86,815 in compensation for complaints relating to cases handled by Concentrix” the report added.
That included almost £68,000 for worry and distress.
The BBC has previously reported the case of Nicola McKenzie, a teenage mother who had her child tax credits stopped by the company after she was wrongly accused of being married to a 74-year-old man.
Concentrix was hired to try to save more than £1bn in incorrect or fraudulent tax credit payments, but saved less than a fifth of that target.
HMRC, the UK’s tax agency, terminated the contract in November.
Senior figures from HMRC and Concentrix will be called before MPs later this month to explain the failures.
A Concentrix spokesman said: “This was a hugely complex contract and programme, and as the report highlights, a number of issues emerged at the outset which laid the foundations for the challenges experienced throughout, particularly last year.”
The firm was paid £32.5m during the contract, but told the NAO it had made a loss of £20.5m on the deal.
An HMRC spokesman said: “We apologise to all those who did not receive the standard of service that they should have”.