Answer
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
In Islam, you are not financially obligated to repay friends for losses if your recommendation was made in good faith, with clear limits on your knowledge, and without guaranteeing the person’s honesty. However, if you knowingly overstated trustworthiness or were negligent, some scholars say you may bear partial liability. Ethically, you should still assist in resolving the matter and warn others.
Responding to your question, Sheikh Ahmad Kutty, a senior lecturer and an Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states:
The Islamic Perspective on Financial Responsibility
Your concern about your husband’s involvement is valid. It raises questions about moral responsibility and Islamic law. Muslim jurists agree that offering a character reference (Ta`rif or Shahadah) is serious. It must be based on verified, personal knowledge—not assumptions or hearsay.
Conditions That May Create Liability in Islam
If your husband vouched for someone without knowing their true character, he may bear some moral responsibility. This is especially true if he spoke with certainty. Even with good intentions, overstating confidence in someone’s integrity is ethically problematic.
The Qur’an warns:
{And do not pursue that of which you have no knowledge. Indeed, the hearing, the sight, and the heart—about all those [one] will be questioned.} (Al-Isra’ 17:36)
Scholars like Imam An-Nawawi (Al-Majmuʿ) and Ibn Qudamah (Al-Mughni) stress that recommendations must be grounded in reliable knowledge. If someone gives a false endorsement—even unintentionally—and harm occurs, they may be held accountable, especially if they were negligent.
As for whether your husband must compensate those who suffered loss, it depends on details:
- If he guaranteed the person’s honesty or suggested complete knowledge, some jurists say he could be partially liable under Gharar (exposing others to risk) and Daman (liability for harm).
- However, if his recommendation was made in good faith with clear boundaries about his knowledge, he is not legally obligated to repay losses. Still, he should ethically help resolve the matter—by advising victims, clarifying his earlier statements, and warning others now that he knows the truth.
Allah said:
{Whoever intercedes for a good cause will have a share in it, and whoever intercedes for an evil cause will share in its burden.} (An-Nisa’ 4:85)
Lessons for Future Dealings and Recommendations
In the future, be cautious when vouching for others. If your knowledge is limited, say so clearly. Character recommendations carry significant ethical weight in Islam. When offered responsibly, they protect the community from harm.
May Allah guide us to speak truthfully, act with integrity, and uphold justice in all our dealings.
The issue is elaborated upon in these fatwas:
- Is Investment with Borrowed Money Permissible?
- Is Taking a Loan for Investment Permissible?
- Investment Using Illegal Money: Permissible?
- Can I Have a Loan for Investment?
- How to Calculate Zakah on Property Bought for Investment
- Buying Shares or Investing in Companies with Haram Products: OK?
- Is It Halal to Invest in Haram Product Companies?
Almighty Allah knows best.