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Are late payment charges that may arise from being late in paying for bills considered as Riba.

For example one misses a payment for their electricity bill, as a result the supplier demands that the amount owed is payed along with a charge that may increase every month his bill remains unpaid.

Note: This isn't a question about loans were a charge plus interest is applied when one misses a scheduled re-payment.

Aboudi
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    "This isn't a question about loans were a charge plus interest is applied when one misses a scheduled re-payment." Except it sorta is, isn't it? They're loaning you the service (electricity) and expecting you to pay them for it later. It's not like you paid for it up front. – goldPseudo May 01 '17 at 16:17
  • @goldPseudo Correct. Even if you pay upfront, additional charges may apply if you exceed your usage limits this, even if you don't you will still sign a contract which has these terms within it, which means that one has agreed to pay interest since day one. Which makes me think that the one that signs such a contract, or one who pays for interest or receives are alike based on the well known hadith – Aboudi May 01 '17 at 16:22

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Yes it is because interest is something which companies charge which is not really their haq, and does not reflect the original price.

Increasing the price of something you have already used is not fair and so is interest as you are not benefiting in any way from the extra charge.

Unfortunately, these things are unavoidable in the west and cannot be considered haram as things like gas and electricity are a necessity. However I would advise you to make payments on time to avoid any extra charges.

Zohal
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  • Maybe a nice additional evidence from islamqa or in al-Muwatta – Medi1Saif Sep 05 '18 at 13:11
  • I agree with most of the above, but I disagree with this statement "which is not really their haq", because of late payments the company would have incurred some expenditure relating to chasing for an outstanding fee, i.e. postage fee, time taken by employees etc.. – Aboudi Sep 08 '18 at 06:13