The Financial Conduct Authority (FCA) has issued an urgent alert to homeowners about dangerous online offers promoting so-called 'golden ticket' promissory notes that falsely claim to clear mortgage debts.
These notes, which can cost borrowers £500 or more, are being marketed as a solution for those struggling with repayments, particularly during the financially stressful festive season. However, the regulator confirms they are completely worthless for settling mortgage obligations.
How the scam operates
Online promoters are targeting vulnerable homeowners with claims that sending a promissory note to their lender will either trigger payments from a mysterious trust fund or should be accepted as full mortgage repayment.
Greg Sachrajda, head of department in retail banking market interventions at the FCA, explained the reality: 'People are sold a service claiming you can send a lender a promissory note and this will somehow clear their mortgage. It doesn't. These promissory notes are just an empty promise.'
He emphasised that lenders consistently reject these documents and return them to borrowers along with guidance about proper payment methods.
Real consequences for vulnerable borrowers
The FCA warns that falling for this scam can seriously worsen a borrower's financial situation. Homeowners risk losing significant money purchasing worthless documents while simultaneously falling behind on their actual mortgage payments.
Mr Sachrajda highlighted the double danger: 'They're spending significant sums of money, £500 or more, for something that is worthless whilst they're not engaging proactively with their lender, who could actually help them make their situation better.'
This comes at a time when the Financial Ombudsman Service reports handling cases where people have been sold these ineffective promissory notes.
Proper help is available
Rather than wasting money on fraudulent schemes, the FCA urges borrowers to contact their lenders directly. Mortgage providers are required to treat customers in financial difficulty fairly and can offer genuine solutions including:
- Extending the loan term
- Temporarily switching to interest-only payments
- Agreeing payment holidays
- Arranging assisted voluntary sales if necessary
Free debt advice is available from organisations including National Debtline, StepChange, Citizens Advice and MoneyHelper.
A spokesperson for the Financial Ombudsman Service stated: 'Relying on a promissory note to stop making payments puts your home at risk of repossession. If you're having any problems with your mortgage, always speak to your mortgage lender first.'
Karina Hutchins, head of mortgage policy at UK Finance, reinforced the message: 'Promissory notes are not a valid way to pay your mortgage. Borrowers who send these documents will still need to make their payments and repay their mortgage. Not doing so risks worsening their financial situation.'
