Young people are being threatened with having their car insurance cancelled due to faults with an app that aims to make policies more affordable, the BBC has been told.
Carrot Insurance uses phone data to measure journey length, acceleration and braking - but some say it often fails to work or wrongly records data.
Tory MP Craig Tracey questioned whether it was "fit for purpose".
Carrot said it was "extremely sorry" some had had a "poor experience".
It told the BBC's Victoria Derbyshire programme "for the vast majority" of young people, the app helps to reduce their premiums and to improve their driving safety.
'Rewards good driving'
Carrot Insurance describes its Better Driver app as "a clever bit of technology which uses 'telematics' to measure acceleration, braking, swerving, and the number and length of journeys that you make".
Users can then be rewarded for good driving.
The premise is to help lower car insurance for younger people - who traditionally pay higher prices, as they are considered more at risk of an accident.
Most telematics services run from a black box, which is a small device fitted to a car, that records data when it is being driven.
But Carrot Insurance's Better Driver policy relies solely on GPS and Bluetooth - and requires a WiFi or data connection.
More than 20 young people have told the Victoria Derbyshire programme they have had issues with the app - in some cases causing them to have their insurance cancelled, or end the policy themselves.
'I was on a train'
Separate individuals have told the BBC the app had recorded them as driving while they were actually cycling or on the train.
The person on the train was marked as speeding, which Carrot said "can occur in some very rare instances when customers pair their phone to an additional Bluetooth device".
One woman, 28-year-old Jess, said Carrot cancelled her policy in December 2018 because she was not using the app - which she said was not working properly.
"In the end I lost two years no claims discount," she told the BBC.
"I have a new policy now but declaring the cancellation meant it cost me £1,600."
Carrot said it had fully compensated "all those customers" to which the BBC had alerted them.
Others have told the BBC their journeys had not been recorded properly by the app.
Layla, 22, said after the app was updated in December, it stopped working.
"[Carrot] emailed me to say: 'If you do not connect the app to your car, your insurance will be cancelled,'" she said.
"Then I was, 'Oh my god', panicking."
Carrot said that when the Better Driver App was updated, "Layla began to record journeys accurately, as expected".
Georgia, a 22-year-old barista from Leicester, said she had been "fighting with Carrot back and forth to try and make sure they didn't cancel my policy", after the app "started to play up".
Carrot said it was "actively looking to resolve" the matter with Georgia.
'Not fit for purpose'
Conservative MP Craig Tracey, who chairs the All-Party Parliamentary Group for Insurance and Financial Services, said it was good that the industry had recognised the challenge young people faced to get affordable insurance.
But, he said, while some technological advances had been "really, really positive", there was a need to ensure that regulation kept up.
"It seems like the technology [in the case of Carrot Insurance] is not working, is not fit for purpose. So it really needs to be looked at.
"There's a glitch somewhere along the line," he said.
He called on the Financial Conduct Authority (FCA) to investigate.
The FCA has told the BBC that for the second half of 2018, Carrot Insurance had the most complaints relative to the size of the company.
Carrot Insurance said in a statement when the issue with its app "became apparent in April 2019 we acted as quickly as possible to put things right and prevent anyone else experiencing similar problems or being disadvantaged in any way.
"We are continually developing and improving our technology to provide the best possible products and services for our customers."