Ruling on working as a debt collector for a riba-based financial institution
Question: 150411
I work for a company that offers different services, one of which is debt collection for other companies in return for a percentage of the money recovered. Recently a contract has been drawn up between our company and a financial institution to collect their debts (from clients of the financial institution to whom it gave loans which have not been paid off), in return for a percentage of the money recovered. What is the ruling on the work that we do with these financial institutions? Please note that we are collecting debts for a number of ordinary companies, not financial institutions; this is the first financial institution that we have added to our list. I am confused about my income; is it halaal or haraam?
Praise be to Allah, and peace and blessings be upon the Messenger of Allah and his family.
It is permissible to work in debt collection in return for
a fixed fee or a percentage of the debt recovered, because this comes
under the heading of acting as an agent in return for payment. But it is
stipulated that the debt should not be riba-based. If it is riba-based,
like debts owed to riba-based banks, it is not permissible to work in
collecting those debts, because that comes under the heading of helping in
something haraam. Allah, may He be exalted, says (interpretation of the
meaning): “Help you one another in Al‑Birr and At‑Taqwa (virtue,
righteousness and piety); but do not help one another in sin and
transgression. And fear Allaah. Verily, Allaah is Severe in
punishment”[al-Maa’idah 5:2].
The scholars of the Standing Committee for Issuing Fatwas
were asked: I have a business that specialises in debt collection; I collect
the debts in return for specified fees that I charge on the basis of the
contract. Is there anything forbidden in that? Some banks have contacted me
to ask me to recover debts owed to them by others, and they will give me a
fee, but up till now I have not agreed to that, because I want to ask for
your opinion and shar‘i advice. Should I take the fee from the creditor
before or after obtaining his money? Is there anything wrong with charging a
set percentage of the money as a fee?
They replied:
If the debts are not riba-based, there is nothing wrong with
taking payment for recovering them for the creditor from the one who owes
them. But with regard to riba-based loans, such as loans owed to commercial
banks, it is not permissible for the Muslim to work in recovering them or to
take payment for that, because this comes under the heading of helping in
sin and transgression, and approving of evil.
The amount of the fee and the time of payment depend on what
is agreed to between the two parties, because the Prophet (blessings and
peace of Allah be upon him) said: “The Muslim are bound by their conditions,
except a condition that makes something forbidden permissible or forbids
something that is permitted.” End quote.
Shaykh ‘Abd al-‘Azeez ibn Baaz, Shaykh ‘Abd ar-Razzaaq ‘Afeefi, Shaykh
‘Abdullah ibn Ghadyaan, Shaykh Saalih al-fawzaan, Shaykh ‘Abd al-‘Azeez Aal
ash-Shaykh, Shaykh Bakr Abu Zayd
Fataawa al-Lajnah ad-Daa’imah,
14/269
Based on that, if the financial institution is owed
riba-based loans by others, it is not permissible to work in recovering
those debts and you should not participate in that. If your work is limited
to recovering permissible debts, it is permissible for you to remain in that
company.
And Allah knows best.
Source:
Islam Q&A
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