Comments: Do cash-back contracts involve unlawful interest?

[Anonymous]

one point not mentioned in this article is that the amount of payment the buyer pays monthly entitles him to a particular, however in a cashback scheme he recieves a much poorer phone. as a result inessence what is haapening is that the broker is exchanging the better phone for poorer phone and cash inmlieu of the better phone.</p>

[Anonymous]

Does the contract not contain ambuguity? In a sense that the mobile phone shops never release the contract info?*******

[Anonymous]

what if the company pay money into your account before the big company take it out?

[Anonymous]

Don't you see? A rose is a rose with any other name!

[Anonymous]

I don't see how the money a customer pays to service provider is a loan. This is how the deals work: </p>



A customer signs up to a contract through a mobile phone shop (agent). </p>



The customer recieves a phone, a sim (talktime) and cash back (to pay towards their bill). </p>



The phone shop (agent) recieves commission from a distributor (agent for the networks)</p>



In turn the distributors get paid commission from the network provider. </p>



The customer than pays the service provider the agreed amount each month. </p>



This is not a loan as the service provider does not pay the money back to the customer, and has no agreement to do so. Infact none of the service providers offer such a deal, it is the agents whom make the deals. Therefore the contract of cash back is between the customer and the shop (agent), where as the contract of payment for the service being provided*******is between the customer and the service provider.</p>



Also there is not an exchange of cash for cash, as the customer does not pay the shop*******(agent) anything. The agent is providing a service and is duly paid commission from their distributor. The cash back given to the customer*******is a percentage of their commission, but they do not take any cash from the customer in return.</p>

[Abuz Zubair]

In the cash-back scheme the agent and the company are inseparably linked together. Therefore, the buyer cannot approach the company directly, he must do so through an agent. This is why the company and the agent are to be viewed as one entity, which is going into a contract with the buyer.</p>



The buyer is, therefore, approaching this entity and exchanging currency in instalments for phone instantly + currency later on. Hence, he is paying more in return for less money (Riba al-Fadhl), in instalments as well (Riba al-Nasia).</p>



Or a clearer example:</p>

Buyer giving money in instalments – in return for – less money after 6 months + phone = Riba.</p>



wasalam
</p>

[Anonymous]

&quot;In the cash-back scheme the agent and the company are inseparably linked together. Therefore, the buyer cannot approach the company directly, he must do so through an agent.&quot;</p>



I'm sorry but that is not true. There are hundreds of Orange, Vodafone, T Mobile, O2 and 3G shops up and down the country. Therefore a customer can very EASILY approach a company directly. These shops offer exactly the same deals as distributors and agents, however they do not offer the discounts given via cash back.</p>



Also*******the agent, the distributor and the service provider are not one entity. As i stated before the customer does not pay the agent ANYTHING, they do not sign a contract with the agent, they sign it with the service provider. For signing the customer up to the contract, the agent recieves commission. </p>



Now if an agent decides to give cash back to the customer out of their commission (entirely up to them, service providers do not encourage this in any way), this in no way is exchanging money with the customer. As the customer has not paid the agent a penny, they have paid the service provider.</p>



&quot;Buyer giving money in instalments – in return for – less money after 6 months + phone = Riba.&quot;</p>



In many cases (T Mobile contracts) the buyer doesn't pay in installments, they pay in one lump sum (annual payment). I don't think this*******would have*******any consequence on the ruling, but*******the statement*******is still wrong.</p>



Also in many cases the customer recieves the same amount of money and not &quot;less money&quot;. Again I don't think this would have any effect on the ruling, but it is not entirely accurate.</p>



And again in many cases customers recieve all their cash back up front in one go, and not &quot;after 6 months&quot;.</p>



From reading the article and the replys, I get the feeling people don't quiet understand how these contracts work. And more importantly how the mobile industry works.</p>



I'm not saying that the cashback deals are permissable, I'm not qualified to make a judgement. However, having previously worked in a mobile phone shop, I don't agree with some of the things that have been written in the article with regards to how the deals work, as they simply are not correct.</p>

[Anonymous]

I still find this very confusing, isn't there a version for Dummies ?</p>

[Anonymous]

I advice some people to fear Allaah!</p>



I have not fully understood the article but it deffenatly buts it into dout, some people with shops that do the cashback deal need to fear allah</p>



the punishment of riba is very harsh</p>



don't take this world instead of the hereafter</p>

[Anonymous]

Originally Posted by Anonymous</p>

I advice some people to fear Allaah!</p>



I have not fully understood the article but it deffenatly buts it into dout, some people with shops that do the cashback deal need to fear allah</p>



the punishment of riba is very harsh</p>



don't take this world instead of the hereafter</p>

</p>



I advise EVERYONE to fear Allah, not just &quot;some people&quot;. If you have not fully understood the article than how can you imply mobile phone shop owners are doing wrong?</p>



Yes the punishment for riba is very harsh, however you cannot make something that is not haraam, haraam.*******The article does not correctly explain how cashback deals work. Therefore the fatwa is issued upon incorrect information, and could be highly flawed.</p>

[Anonymous]

salaam</p>



i really dont understand this but dont want to get involved in haraam. i just turned down a deal today as i wasnt sure.</p>



could someone word it easier for the lay people? jazak allah Khair</p>

[Anonymous]

*******Asslamualikum

BarakAllah Vikum Ya shikh

Can you please publish this Fatwa in Arabic language, this is if you have not done so, and if you have, i would kindly requst you to send me a copy so i could understand it more clearly( <span style="font-weight: bold;">to be a Huja on me</span>). Also if you can send a copys to the islamic centers in order to establish the command of our beloved prophet Mohammed SAW, in commanding the good and forbiden the evil.

My email is: Rgdaleen@yahoo.co.uk

Just to state that i do respect the shikh who wrote the Fatwa and i do take his Fatwas as i do consider the shikh as some has the ability to judge in these issue in the west.

Thank for your concern
your brother Ali

[Anonymous]

Just one point here.</p>

In terms of RIBA, i agree that the Sheikh may have misrepresented how cash back schemes work, and*******it appears to me that is is not Riba (although Allah (SWT) knows best and may he guide us all Inha-Allah on the right path).******* However, when I thought about all this in detail, I realised that such deals may be impermissible anyway in view of Shari-ah based contract law.******* If I am not mistaken, any contract must not be contingent on another contract (i.e. contract within a contract).******* My experience with cash back agents is that although they do a clear up-front contract as to how much cash they will give and when, they make it contingent with us staying on the contract with the phone service provider for a specific period of time (usually six months) and ask for proof in the form of monthly bill payments.******* If we lose any of the bills, or cancel our separate contract with the phone provider, they do not pay the cash.</p>



Does anyone have a view on this?******* I am saying that it may not be Riba, but still a non Shari-ah compliant contract with the agent.</p>



Any views?******* My email address is munibali@tiscali.co.uk</p>

[Anonymous]

i disagree with this totally. i do not feel im lending my money to the mobile company. as they said the money taken is a matter of security to ensure that people complete the contract. everybody knows that this is allowed. </p>

if they return all my money to me and i get a handset on top of that i consider it to be my reward from the company for using their service for the length of the contract. if i get less money back then the lesser amount is my paying for the service and the rest is just a security for the company not a loan to them.</p>

it isn't right to give fatwas on things which you don't fully understand and i think it is clear from the article that the sheikh has misunderstood the system. i am not a liberal follower of whatever seems easy but i do believe it's important to make one's voice heard in these matters. 'do not make haram upon yourself what Allah has made halal for you</p>

[Anonymous]

Yes I do agree, but does anyone have a view about the contract with the 'agent' being impermissible because it is contingent on another contract (the one with the 'mobile phone company', so it is a contract within a contract effectively.</p>



Any views?</p>

[Unregistered]

Salaam

Salaam

I believe that certain company Cashback is haraam but cannot point out which companies. This is due to the fact that some companies keep your money for a while to gain interests which then is sent to you. (You may notice why they try their best to say things like it takes 45 days to process your claim when in the 45 days process they have gained interest from the banks)

Why is my Cashback halal?

Number 1: My business account is a Islamic Business account so therefore no interest is gained and no Interest payment is given to you.

Number 2: The payment which i will receive from the network provider will only be used to pay cashback directly to you.

You can visit my website on www.mobilefonez4u.com

Jazakallah Khairan