The organisation, calling itself Action Against Banks, claims the money will be used to purchase shares to enable it to take control of National Home Loans (NHL).
NHL has experienced financial difficulties in the past, and many borrowers are disgruntled about its high mortgage rates.
However, the letter from Action Against Banks (AAB) is riddled with inaccurate statements about NHL's financial position. The feasibility of AAB's plans to take over NHL is also highly questionable.
But what is particularly worrying is that the letter asks borrowers 'to consider not making any more repayments, as this would cut off their (NHL's) lifeline'. Instead, it says borrowers would make their mortgage repayments to their solicitors.
James Fuller, a spokesman for NHL, said: 'The letter is inciting people not to pay and to break their contracts with us. If people do not pay their mortgages, all it achieves is that if they persist eventually they will get repossessed.'
An equally disturbing aspect is that AAB is asking borowers for money - 'whatever you can afford in excess of pounds 23'. The money is supposedly for an 'Action Committee' to buy shares and take control of NHL by obtaining 51 per cent of the shareholding.
The letter, over the name CT Sullivan, gives an undertaking that he will not use the money until 'we can raise enough' to get the control - otherwise 'your money will be returned'. The writer ends by saying he makes no promises but will do his best.
The given address is 9 Harforde Court, John Tate Road, Hertford, Hertfordshire, which is a light industrial building, but there is no listing in the telephone directory for Mr Sullivan or the AAB at that address.
The NHL spokesman expressed concern and added: 'We would advise everyone not to send any money in response to this letter. If they have any problems with their mortgage, they should contact us.'