DAMMAM, 5 December 2005 — The Ministry of Commerce has warned the public against dealing with debt-collecting offices which are proliferating in the Kingdom.
The offices collect unpaid debts for a fee.
They harass debtors until the debt is paid. The office adds a percentage to the money collected from defaulters, which is illegal and it adds more problems to people who are already in debt.
Quoted by Al-Madinah newspaper, Muhammad Abdul Rahman Al-Shawi, director of the Ministry of Commerce branch in the Eastern Province, said that the activities of the offices were illegal and that the ministry did not approve of such offices. Many debt-collecting offices charge an additional percentage above the money collected and that is a clear violation of laws and regulations of the ministry.
Al-Shawi said the offices extract large sums from people who are already in deep trouble because of debt. He said that the percentage above the actual debt is a direct violation of the Shariah and is in fact usury.
According to Misfer Al-Kahtani, the manager of a debt collecting office, there are legal and illegal debt-collecting offices.
“We operate legally because we represent clients who cannot follow up on collecting their outstanding payments. We go after defaulters, we visit courts and carry out all procedures for our client. When we collect the money, we charge 10 percent as fees. The illegal type buys the debt from the client, adds 10 percent to it and goes after debtors. The debtors who end up paying more than they owe. This is against the Islamic law.”
