Asylum seekers living in accommodation units in Cardiff have been told that they must wear red wristbands in order to receive food. New arrivals to the Welsh capital are being told that they must wear the coloured wristbands when housed by Clearsprings Ready Homes, a private company contracted by the Home Office.

Only last week news emerged that homes in Middlesbrough were having their front doors painted red by the private company housing them, G4S. Migrants said they faced abuse after the brightly-painted doors made them easily identifiable as asylum seekers.

Those living in the housing units in Cardiff were told they needed to wear the wristbands if they wanted to receive the allocated three meals a day. UK asylum seekers are prohibited from working or claiming mainstream benefits.

Cardiff central MP Jo Stevens said on Twitter that she had been in touch with the Operations Director for Clearsprings Group as a matter of urgency and had been told that the wristband requirement will end on 25 January.

Some asylum seekers receive a small amount of money to spend on food or necessities or given an Azure card to use in supermarkets. Newly-arrive asylum seekers stay in hotel-like accommodation with meals provided – with no Azure Card or cash.

One former resident, Eric Ngalle, 36, said he spent a month in Lynx House in Cardiff, which is initial accommodation for asylum seekers run by Clearsprings. He told the Guardian: "My time in Lynx House was one of the most horrible experiences in my life. I hated wearing the wristbands and sometimes refused to wear them and was turned away from food.

He said he had lodged complaints to both the Clearsprings and the Home Office. He added: "We had to walk from accommodation about 10 minutes away to Lynx House to get food and sometimes we were walking down the street with our wristbands showing.

"On the road we had to walk down there is often heavy traffic. Sometimes drivers would see our wristbands, start honking their horns and shout out of the window, 'Go back to your country.' Some people made terrible remarks to us."

Clearsprings group said that it had been operating the system since May 2015 because of the increased numbers of asylum seekers. A spokesperson said: "Clearsprings has taken steps, agreed with the Home Office to increase capacity in line with this demand in the form of additional self-catering accommodation."