Hiring a person or a specific entity to collect debts for a fee is permissible in principle and is considered a form of “ju῾ālah.”

Ju῾ālah, pronounced with a “jīm” sound, is defined as assigning a known compensation for performing a specific, known, or unknown difficult-to-control task.

The Mālikī scholars have elaborated on this by saying that it is a form of leasing for a benefit that is likely to be obtained. Examples include someone saying: “Whoever returns my stray animal, or my lost item, or builds this wall for me, or digs this well until water is reached, or sews a shirt or garment for me – they will receive such and such.”

An example of this in modern times is debt recovery done by some companies, known as credit collection.

Scholars cite evidence for this from the Qur᾽ān: “And for him who finds it is the reward of a camel load, and I am responsible for it” [Yūsuf: 72].

It does not matter if the fee is paid from outside the debt amount or if a percentage of the debt is deducted, as it is considered compensation for the ju῾ālah or wikālah (empowerment).

Fatwā issued by Dr. Khālid Naṣr