Ruling on working in a debt purchasing company

Buying debts
from their creditors for an immediate price that is lower than the value
of the debt comes under the heading of haraam riba-based transactions. It
combines riba al-fadl with riba an-nasee’ah, so it is the sale of a debt
for cash of a different amount with a delay in payment. Al-fadl means that
the debt is greater than the amount of money paid and an-nasee’ah means
that payment is delayed until the time the debt becomes due. 

There is also
another problem that makes this transaction haraam, which is ambiguity.
There is no certainty that you will be able to collect the debt that is
owed, so it is something unknown, and the Prophet (blessings and peace of
Allah be upon him) forbade ambiguous transactions, as was narrated by Muslim
(1513) from the hadeeth of Abu Hurayrah (may Allah be pleased with him). 

There are
fatwas from the scholars and resolutions of fiqh councils stating that this
transaction is haraam. 

1.

The scholars
of the Standing Committee for Issuing Fatwas said: 

It is not
permissible to buy or sell promissory notes, currently due or deferred, for
less or more than the amounts stated in them, because this is regarded as
blatant riba, and this transaction combines riba al-fadl with riba
an-nasee’ah, both of which are haraam on the basis of the texts (of the
Qur’an and Sunnah). End quote. 

Shaykh ‘Abd
al-‘Azeez ibn Baaz, Shaykh ‘Abd al-‘Azeez Aal ash-Shaykh, Shaykh ‘Abdullah
ibn Ghadyaan, Shaykh Saalih al-Fawzaan, Shaykh Bakr Abu Zayd 

Fataawa
al-Lajnah ad-Daa’imah,
13/333 

2.

It says in the
resolution of the Islamic Fiqh Council belonging to the Organization of the
Islamic Conference issued during its seventh session: 

Selling
promissory notes is not permissible according to Islam, because they lead to
riba an-nasee’ah, which is haraam. 

Reducing the
deferred debt in order to expedite payment, whether at the request of the
creditor or the debtor (“reduce and pay now”) is permissible according to
sharee‘ah. It does not come under the heading of riba that is haraam so long
as it is not based on prior agreement, and so long as it is decided between
the creditor and debtor. If a third party gets involved, it is not
permissible because then it comes under the ruling on selling promissory
notes. End quote. 

Resolution no.
66/2/7, Majallat Majma‘ al-Fiqh al-Islami, issue no. 7, 2/217.
Promissory notes include checks, letters of credit and the like. 

3.

In the
resolutions of the Islamic Fiqh Council of the Muslim World League, in their
sixteenth session, it says: 

Secondly,
forms of selling debt that are not permissible include: 

(a)

Selling debt
to the debtor for a deferred price that is greater than the amount of the
debt, because this is a form of riba and is forbidden according to
sharee‘ah. This is what is called “rescheduling the debt”. 

(b)

Selling the
debt to someone other than the debtor for delayed payment of the same type
of wealth or otherwise, because this is a kind of selling debt for a debt,
which is forbidden according to sharee‘ah.

Thirdly: some
contemporary applications in the area of selling debt: 

(a)

It is not
permissible to sell promissory notes, cheques, letters of credit etc.,
because that involves selling debt to someone other than the debtor in a
manner that involves riba. 

(b)

It is not
permissible to deal in riba-based promissory notes, whether by issuing them,
dealing in them or selling them, because they involve riba-based interest. 

(c)

It is not
permissible to put debt in the form of documents or contracts and sell them
in a secondary market, because that comes under the heading of selling
promissory notes etc., which is mentioned in item (a). 

Statement no.
89/1/16: 

Based on the
prohibition of this transaction, it is haraam to work in those companies and
institutions that buy people’s debts, whether in the form of checks or
letters of credit, or in the form of phone bills and so on. 

Those who go
against the command of Allah should beware lest some Fitnah (trials and
tribulations) befall them or a painful torment be inflicted on them (cf.
an-Noor 24:63). 

The one who
wants to work in those companies should understand that whoever gives up
something for the sake of Allah, Allah will compensate him with something
better than it. 

Allah, may He
be exalted, says (interpretation of the meaning):

“And
whosoever fears Allaah and keeps his duty to Him, He will make a way for him
to get out (from every difficulty).

3. And He
will provide him from (sources) he never could imagine”

[al-Talaaq
65:2-3]. 

3.

He should
strive hard to find halaal work. We ask Allah, may He be exalted, to help
and guide him and to make him independent of means with that which He has
permitted so that he will have no need of that which He has forbidden. 

And Allah
knows best.