The head of online pre-paid card firm Pockit has vowed to take action after admitting more than a thousand of its customers have had accounts frozen.
Virraj Jatania told Radio 4's Money Box programme that new processes would be introduced to address the failings.
Pockit provides accounts to more than half a million customers that it says are typically "financially underserved, low income, often unbanked consumers".
The UK financial regulator has said it is aware of issues with the company.
The Financial Conduct Authority (FCA) told Money Box it was engaging with Pockit to ensure the problems were being addressed as quickly as possible.
Pockit allows customers to load money on to a card and then, for a price, it offers many services that a bank would - such as faster payments and direct debits.
However, one Money Box listener, Sian, told the programme that her Pockit account had been locked on 9 March.
The company asked her to send identification documents so they could verify her account. She sent them on the same day but the account - containing £1,000 - is still locked. Sian says she desperately needs access to the money to pay for her car's service and MOT.
Another listener, Rob, told the programme he'd had an account with Pockit for years but it was blocked "out of the blue" last month. Like Sian he was asked to provide identification documents, which he did, but the account - containing £1,700 - remains locked. Rob says he now has debt collectors chasing him for money.
Both Sian and Rob told Money Box they had been frustrated with the poor customer service they had experienced, saying it was impossible to speak to someone on the phone and that emails would often go unanswered.
The Financial Ombudsman received 97 complaints about Pockit between January and April 2021, compared with fewer than 10 in the same period the year before.
Mr Jatania told Money Box that he could not comment on specific cases but that he "recognised that temporary blocks on accounts could be very distressing" and he took it very seriously.
He added that as Pockit operated in a regulated environment there were laws the company had to follow, and that accounts were only frozen when suspicious activity was detected and most cases were resolved quickly.
Regarding the customer service concerns, he said the firm would employ more staff and that a "live chat" system would help to deal with customers' problems more quickly and effectively.
He added that additional processes would be introduced so that if a case was not resolved within a certain timeframe, accounts would be closed down and funds returned to source.
Last week, the FCA wrote to Pockit and other e-money firms to remind them that they need to adequately disclose the differences in protections between e-money accounts and bank accounts.
The Financial Services Compensation Scheme protects customers when financial firms fail. It can pay compensation of up to £85,000 for deposits, but Pockit and other e-money firms are not covered by the scheme.
You can hear more on this story from BBC Radio 4's Money Box by listening again here shortly after broadcast at 12pm, Saturday 22 May.