Question:
If someone works at a phone company (Telus), and is required to pitch warranty on the phones they sell. What is the ruling on that. Also what is the ruling on late payment fees in the phone contract?
Answer:
A warranty provided directly by the company selling the product is allowed in Islam. For example, if Costco offers its own in-house warranty for a computer, then it’s fine to buy it. But if the warranty is offered by a third party (not Costco), then it would not be allowed to purchase it.
Now, regarding the second question about late payment fees: Since the employee isn’t the one creating the contract—they’re just selling a contract already made by the company—the contract itself would be considered halal, except for the penalty fees. If the employee takes payment from customers specifically for those penalty fees, that would not be allowed in Islam.
It’s important to understand that in most non-Muslim countries, contracts usually include late payment fees by default. Because of this widespread difficulty, it falls under a category in Islamic law known as shubha—a doubtful or unclear matter—that requires purification of the money. There’s a legal principle in Islamic jurisprudence:
“General need is treated like necessity” (الحاجة العامة تنزل منزلة الضرورة).
This means that when a need becomes widespread among people, it may be treated like a necessity, and certain exceptions can apply in such cases.
That said, to purify the money earned in this situation, it is required for the person to give 5% of their salary to charity.