Question: 

If one had an fraud online transaction on ones credit card. Immediately informed the bank and blocked the card. The Bank now wants me to pay back this amount which was fraudulently taken under my name.

Can one pay this amount with Interest received from various different private banks or government banks?

Answer: 

Interest cannot be used to pay the bank for fraudulent use of the card as you will be benefitting from the interest funds which is not permitted. You will be liable to pay the bank from personal funds.

Our reasoning for the above ruling is as follows, you applied for a credit facility from the bank. The credit facility afforded by the bank can be equated to a loan that is granted to you by the bank. If you were granted a $10 000 facility, it is as though a $10 000 loan has been forwarded to you, as it available to you at any given time and moment. It is just a matter of swiping your card to access the funds. Now, after taking the loan from the creditor, you will be liable to pay the for the loaned funds when used, irrespective of whether you personally used the funds, or you gave it to another family member to use, or the funds were stolen whilst in your possession (through a fraudulent transaction.) You cannot hold the creditor liable for the stolen funds. Therefore, we conclude by saying that using interest funds to pay for the stolen funds is tantamount to using interest funds for one’s benefit which is not permissible.

ويملك المستقرض القرض بنفس القبض عندهما )الدر المختار 193 ج 4 )

And Allah Ta'aala knows best!

ANSWERED BY: Mufti Mohammed Desai 

CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B 

Date: 14 Rabi-ul-Awwal 1441 

English Date: 12 November 2019