BACKGROUND: Asylum seekers (AS) and refugees often suffer from severe psychopathology in the form of post-traumatic stress disorder (PTSD). As PTSD impacts memory functions, and as asylum applications rely on personal accounts, AS with PTSD are at more risk of being rejected than refugees. METHODS: We studied the mental health of failed asylum seekers (FAS, N = 40) and a matched sample of AS (N = 40). Participants were administered structured interviews on sociodemographics, flight, exile and standardized questionnaires on PTSD, anxiety, depression and pain. RESULTS: Both samples were severely affected; >80% exhibited at least one clinically significant condition. CONCLUSION: Given the great vulnerability of these individuals, long and unsettling asylum processes as practised in Western host countries seem problematic, as does the withdrawal of health and social welfare benefits. Finally, high rates of psychopathology amongst FAS indicate that refugee and humanitarian decision-making procedures may be failing to identify those most in need of protection.