A PAIR of Gwent MPs have backed a campaign calling for banks to stop punishing account holders for going over their overdraft limits with sky-high interest rates.

Blaenau Gwent's Nick Smith and Islwyn's Chris Evans are among 84 MPs who have added their names to a letter from chief executive of consumer rights body Which? Peter Vicary-Smith calling for an end to the fees.

The letter to chief executive of the Financial Conduct Authority (FCA) Andrew Bailey said charging the fees to customers who were likely to already be struggling was "neither fair nor appropriate".

Mr Smith said: “It’s appalling that, especially at a time when our financial safety nets are smaller than ever, that one unexpected bill or cost could plunge a family into a spiral of debt.

“These are loyal customers, many who have been with their bank for years and decades, whose only crime is getting buffeted by what life has to throw at them. Banks already make money hand over fist without needing to punish people like this.”

And Mr Evans, a former banker, said: "The main thing we need to see from government and the FCA is action. There have been too many delays.

"Too many customers face high unplanned overdraft charges and safeguards must be put in place to protect heavy overdraft users from unfair and extortionate fees as soon as possible.

"Until these fees are controlled and reduced, we will see more people with serious debt problems."

The letter followed a study by Which? which found some major high street banks were charging as much as £160 for going £100 over an overdraft limit for 30 days. In comparison, the equivalent charge by a payday loan company, which also charge extremely high interest rates for short-term borrowing, would be just £24.

Which? money expert Gareth Shaw said: “It’s alarming that the majority of banks are still allowed to charge more than payday loan firms through these rip-off overdraft fees.

"These extortionate fees can cost thousands of pounds a year, hitting those who can afford it the least.

“The regulator cannot drag its heels any longer.

"We must see urgent action to restrict these charges, bringing them into line with arranged overdraft fees to finally end this unfair practice.”

In the letter Mr Vicary-Smith said: "There is a particular issue with how banks treat customers who are heavy overdraft users.

"These customers are clearly identifiable by banks as being vulnerable and in financial difficulty, but banks' current practices towards these customers are neither fair not appropriate.

"The response of the banks, which is to charge excessively high fees that cause significant consumer detriment, is evidence of a sector that does not have a culture of treating consumers fairly.

"The FCA's latest figures reflect these concerns, with the most recent update showing that 30 to 65 per cent of unarranged overdraft charges are paid by customers who used their unarranged overdraft over 15 times in a two year period.

"It is clear that these charges are unacceptable and only serve to push vulnerable people deeper into debt."