Cashplus is being forced to outline its compensation plans after customers were locked out of their accounts during a service failure this week.

Treasury Committee chairman and MP Nicky Morgan has written to Cashplus chief executive Richard Wagner asking for details about the “causes and consequences” of the issues, which left a number of customers unable to make or receive payments.

She also asked whether Cashplus was covered by provisions covering unauthorised payments, and if not, to outline its policy on compensating fraud victims.

The failures began on Monday September 17.

“While Cashplus may not be regulated as a bank, it claims to offer ‘the UK’s most seamless banking services experience’,” Ms Morgan said.

“Its customers rightly expect continuous access to their accounts, and it should be held to the same standards of operational resilience as a retail bank.

“I have written to Mr Wagner with questions about the causes and consequences of the service failure,” she added.

Mr Wagner has been given until Friday September 28 to respond to the committee, explaining when he first became aware of the failure and when it first alerted City watchdog the Financial Conduct Authority (FCA).

Ms Morgan is also pushing the Cashplus boss to detail the controls that were in place to try to avoid such a failure, and the steps it will take to ensure a similar failure will not happen again.

“Cashplus markets its personal accounts to those with poor credit histories, and its business accounts to small firms,” Ms Morgan said.

“A loss of banking services can carry particularly severe consequences for these types of customer, and I have also asked Mr Wagner how those who have lost out will be compensated.”

Mr Wagner will also have to detail the proportion of business and personal accounts affected.

Cashplus has around 1.3 million customers, according to its website.

Cashplus describes itself as a digital challenger to banks, offering services such as pre-paid credit cards and transfer payments.

Cashplus said in a statement: “Some of our customers recently experienced issues as a result of problems with our third-party card processor. We have been assured these issues are now fixed, and customers will be able to access their accounts.

“Today our CEO has got in touch with all those affected to apologise and let them know what we are doing to make things right for our customers. We have also outlined the measures we are putting in place to ensure this does not happen again.

“We’re extremely sorry for any inconvenience experienced by our customers and we encourage them to contact us, so we can help make this right for them.”