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RIBBIS IN UNEXPECTED PLACES

Many common financial transactions involve ribbis, so pitfalls abound for the unaware. Following are some common business activities that can, depending on the circumstances, constitute ribbis.

• Cosigning – cosigning on a loan or car lease, even where the lender isn’t Jewish or is a publicly-traded financial institution

• Credit cards – using a friend’s credit card (see sidebar)

• Straw purchasing – purchasing a home in someone else’s name

• Partners – borrowing done by one partner on behalf of the partnership

• Late fees – charging ongoing late fees in a contract (a one-time late fee for each occurrence is permitted)

• Returnable items – selling goods with an unconditional money-back guarantee

• Foreign currency – Borrowing money in a foreign currency even when returned in same currency

• Factoring – purchasing receivables

• Cash discounts – charging different prices for cash and credit

• Early bird discount – offering a heavily discounted price for paying before a certain date

• Pre-payment discount – paying today to lock in a reduced price for an item that is not yet available