A company awarded a $70 million contract to operate outsourced Centrelink call centres was responsible for wrongly cutting tens of thousands of vulnerable people off benefits in the United Kingdom.

Concentrix — hired by the Australian Government to help improve service delivery from Centrelink — was slammed for "gross failings of customer service" after an investigation by the Work and Pensions Committee of the UK House of Commons.

"Vulnerable people lost benefits to which they were entitled through no fault of their own," the damning report by the cross-parliamentary committee found.

"Some were put through traumatic experiences as a consequence of avoidable failures.

"The hardship … meant some claimants took out expensive loans or accumulated rent arrears, exacerbating their financial difficulties."

More than nine in 10 people who appealed against Concentrix's decision to suspend or reduce benefits had their appeals upheld.

"These are extraordinary figures for any appeals process, let alone one that left people in hardship," the committee report observed.

"The original decision-making process was flawed. As a result of those flaws, many thousands of people went weeks without benefits upon which they and their families relied."

Concentrix was contracted in May 2014 to check for possible fraud and error in the provision of welfare benefits through the UK tax credits system and, if appropriate, to reduce or suspend peoples' benefits.

It wrote to more than 300,000 recipients giving them 30 days to prove their eligibility or have their benefits suspended or cut — working under a system where the merest "hint" that a claim contained more than "zero risk" of fraud or error was enough to trigger a review.

Some did not receive the letters, while others dismissed a letter from a private company few had heard of seeking their personal details as a scam.

"The first some claimants knew they had lost their benefits was when they checked their bank accounts," the UK inquiry found.

"The systems used to process evidence provided by claimants were at best slow and at worst unreliable."

A Concentrix call centre meant to handle calls from welfare recipients completely melted down, with people either unable to get through or subjected to massive delays as its "phone banks collapsed".

"I actually tried to ring them and got the engaged tone over 70 times," a witness told the UK inquiry.

"Being 90 minutes on hold, for days on end, and giving up after 90 minutes," another witnesses told the committee.

"When you've only got your mobile phone … that's a lot of money."

Concentrix contracted to reduce Centrelink call waiting times

Concentrix is one of several companies awarded contracts to operate call centres on behalf of Centrelink in a bid to reduce waiting times.

The Minister for Human Services, Michael Keenan, said the experience in the UK was not relevant because Concentrix staff would be doing qualitatively different work and would not be involved in processing claims or deciding on peoples' entitlements.

"The Australian arm of Concentrix has provided telephony services to the Commonwealth since 2016," a spokesman for the Minister said.

Its appointment to do outsourced call centre work for the Department of Human Service followed "a competitive open-market procurement process that was run in line with Commonwealth procurement rules," he added.

"Suppliers were assessed for capability and capacity.

"The department has effective and well-established contract management practices and it constantly monitors and assesses the services delivered by external partners."

'Vulnerable people paid the price' for Concentrix errors

The chair of the UK Work and Pensions Committee, Frank Field MP, told the ABC that the two-year contract awarded to Concentrix — which was not renewed — had "left a trail of destruction in its path".

"The Work and Pensions Committee's inquiry into this mess uncovered evidence of gross failings in customer service and decision-making processes. Vulnerable people paid the price," he said.

"We cautioned that the UK Government should consider carefully the experience of Concentrix before letting any similar contracts, and I would extend similar advice to Australia."

The union representing public sector workers in Australia, which opposes outsourcing of government services, argues the contract should not have been issued.

"Given that track record it's incredible that Concentrix would be given a contract to do Centrelink work," the assistant national secretary of the Community and Public Sector Union, Michael Tull, told the ABC.

"They were caught essentially ripping off vulnerable people, cutting corners in the work they were contracted to do, so Concentrix made a bigger profit and poor and needy people missed out."

"It screwed it up royally. It cost UK taxpayers 43 million pounds to clean up the mess, and this is a company that now has a Centrelink contract," added Jason Ward, a researcher who has examined Concentrix as part of a wider study on the outsourcing of government services.

Mr Tull said he did not "buy the argument" that the work was low-level contact work and that Concentrix's performance in the UK was not relevant, arguing that actions or omissions by the outsourced staff could still have an impact on clients.

Concentrix responded to requests from the ABC for an interview or a response with "no comment".