A Home Office contractor supplying accommodation for asylum seekers has come under fire after reportedly giving migrants brightly coloured wristbands which they must wear at all times.
The wristbands have been handed out to asylum seekers staying at Lynx House in Cardiff so they can claim breakfast, lunch and dinner.
Housing bosses insist the bands are discreet and do not single out residents.
But the move - which comes following a similar controversy in the north of England earlier this week - has been slammed by human rights groups.
The Welsh Refugee Council (WRC) claimed the wristbands echoed the yellow star Jewish people were forced to wear during the time of Nazi Germany.
WRC policy officer Hannah Wharf said: "We have raised the matter many times with the Welsh Government. It harks back to the Nazi regime with people being forced to wear a Star of David and stand out.
"It's absolutely appalling, it is treating people like lesser beings. It is treating them like animals lining up to feed."
According to reports, a 36-year-old refugee in Cardiff called Eric Ngalle said motorists on nearby roads would sometimes notice the wristbands and tell their wearers to "go back to your country".
Clearsprings Ready Homes told The Guardian its policy came in the face of an increase in asylum seekers.
A spokesman was quoted in the newspaper as saying: "Volumes of people in initial accommodation sites, including Cardiff (have) increased quickly.
"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.
"Those clients in the self-catering units receive a weekly allowance in the form of supermarket vouchers and those in full-board accommodation are issued with a coloured wristband that bears no other logo or text identifying its use or origin.
"Full-board clients are required to show their wristbands in order to receive meals in the restaurant."
Earlier this week, asylum seekers in Middlesbrough said they had been targeted by racist thugs after being housed behind red front doors in the Teesside town.
That prompted immigration James Brokenshire to launch an "urgent audit" of asylum seeker housing in the north East.
Plaid Cymru leader Leanne Wood said the Home Office should also face "serious questions" about the situation in Cardiff.
She said: "I have been told that this alarming practice of forcing asylum seekers to wear coloured wristbands will be stopped.
"It is understandable the Home Office requires asylum seekers to carry some form of identification for practical reasons such as when they collect meals.
"However, such a visible indicator is unnecessary and has left a community already under suspicion open to further harassment and distress.
"I will be writing to the Home Secretary to seek assurance that this practice will not be repeated anywhere else in the UK."
The Home Office declined to comment on the matter, saying it was "an operational issue" for Clearsprings Ready Homes.