Dundee West MP Chris Law has called for a political probe into controversial American benefit assessment firm Concentrix.
Mr Law asked parliament to investigate practises used by the company, who are employed by HMRC to to investigate alleged tax credits fraud.
Westminster announced on Tuesday that the firm’s contact would not be renewed beyond 2017.
Mr Law, however, is concerned about the short-term impact Concerntrix’s assessments could have on members of the public.
He said: “The news announced by HMRC’s chief executive Jon Thompson, that the contract with Concentrix will not be renewed in May next year when it runs out, is welcomed.
“However that is the long-term. In the shorter term my staff are dealing with many people experiencing terrible hardship due to the brutal and disrespectful approach taken by Concentrix towards thousands of people in this country.
“It beggars belief that, at the same time as recent announcements by HMRC that they are to close tax offices in Dundee and other parts of Scotland, they are to redeploy 150 staff to clear up the mess that has been created by a third-party agency that they employed.”
Mr Law says his constituency office has been bombarded with complaints from constituents in recent months.
He insists frustrated locals are receiving letters from Concentrix, wrongly accusing them of having a partner living with them.
This can lead to tax credits suddenly being cut off without warning.
Mr Law added: “Reversing the process is difficult and can take a significant period of time whilst the paperwork is gathered.
“In the meantime the embargo on tax credits remains in place and pushes many families into poverty.”
A Concentrix spokesman said this week they had “operated professionally at all times and within the guidance set by the HMRC”.
The company added it had saved the taxpayer nearly £300 million.
Jane Ellison, financial secretary to the Treasury, has said there is no need for an inquiry.
