Paying a sum as a deposit to a telephone company or other such company
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The third question of Fatwa No. ( 4019 )
Q3: Many companies in America; such as the telephone, water, and electricity companies, require the subscriber to pay an advance sum of money as a deposit; to guarantee the subscriber's continued payment of the bills due to him. Then the company deposits this secured amount in the owner's account at one of the banks, under the savings account mentioned previously (which is that the bank gives the owner of the money a percentage of the profit monthly). At the end of the year, the company returns the secured amount to its owner along with the interest in a single check. Some of the brothers tried to convince the company to pay only the principal, but they refused on the grounds of the law. Is it permissible to accept it, and if it is accepted, what should be done with it?
A3: It is permissible for the subscriber to pay a sum as a deposit to the telephone, water, or
electricity company; to guarantee the payment of the installments due to the company. However, the company depositing this amount in a savings fund, for example, with interest is forbidden, indeed it is one of the major sins; because it is riba (usury or interest), whether the interest is given to the owner of the deposit or to the company. The law does not make the forbidden lawful; rather, the ruling of Allah is what is considered, even if it contradicts the law. It is not permissible for you, nor for the company, to benefit from this interest. If you receive it from the company, you must spend it in the causes of righteousness, while committing to not continuing in this transaction.
Q3: Many companies in America; such as the telephone, water, and electricity companies, require the subscriber to pay an advance sum of money as a deposit; to guarantee the subscriber's continued payment of the bills due to him. Then the company deposits this secured amount in the owner's account at one of the banks, under the savings account mentioned previously (which is that the bank gives the owner of the money a percentage of the profit monthly). At the end of the year, the company returns the secured amount to its owner along with the interest in a single check. Some of the brothers tried to convince the company to pay only the principal, but they refused on the grounds of the law. Is it permissible to accept it, and if it is accepted, what should be done with it?
A3: It is permissible for the subscriber to pay a sum as a deposit to the telephone, water, or
electricity company; to guarantee the payment of the installments due to the company. However, the company depositing this amount in a savings fund, for example, with interest is forbidden, indeed it is one of the major sins; because it is riba (usury or interest), whether the interest is given to the owner of the deposit or to the company. The law does not make the forbidden lawful; rather, the ruling of Allah is what is considered, even if it contradicts the law. It is not permissible for you, nor for the company, to benefit from this interest. If you receive it from the company, you must spend it in the causes of righteousness, while committing to not continuing in this transaction.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.