Charging the customer a penalty on late payment

Q: What can a company do to customers who default in their credit payments?

1. Can a company charge them a penalty for going over their credit term? If not, what are the shar'ee alternatives?

2. Sometimes customers request proofs of deliveries again. Bearing in mind that the invoice was sent to them and stamped received with the delivery, now when the statement is sent at the end of the month they have misplaced their invoices. Can a company charge them for each proof of delivery required, just as fnb and any other bank charges for downloading a statement over 3 months old?

A: This is interest and interest is haraam. In future such people should not be sold goods on credit. One alternative is to take a collateral from them at the time of the sale that in the case of them not settling their debts, the debts will be settled through selling the collateral and recovering the outstanding amounts.

Producing the statement and invoice for the second time does not involve any effort. Hence, the client cannot be charged for this.

And Allah Ta'ala (الله تعالى) knows best.

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Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)


Q: Locating, scanning and some times photocopying and posting or emailing the suppliers does take time and effort of the supplier. Should not the supplier be entitled to charge a nominal agreed upon fee for this additional service?

A: Procrastinating and delaying in settling debts is something which always existed throughout the centuries. However, in today's times, the usurers are in search of ways to earn interest under a different pretext. Hence, if this is permissible, then the one who loans someone money can use the same argument to earn interest under the guise of charging them for the reminders and statements that he sends them.

And Allah Ta'ala (الله تعالى) knows best.

 

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)