Misguidance Financial

April 24, 2006

I hate to write negative things about Muslim organizations, but I also feel it is my duty to warn people about questionable business practices so that they do not fall for the same traps as I have.

We have recently had dealings with a company called Guidance Financial Group. They describe themselves as a company that will “provide you with Sharia-compliant financial products that are competitive and of the highest quality.” I am not about to question whether or not their products are “Sharia-compliant.” What has become questionable are whether or not their services are of the “highest quality” as they purport.

My wife, who is pregnant and was hopeful to buy a new house that can accommodate our new addition was unfortunately misguided by “Guidance.” We both were led to believe that we had been “pre-approved” for, what their representative described as “100% financing” on a home. In other words, we would not have to make a down-payment because of our good credit.

Under this unofficial promise, we proceeded in finding a home, eventually settling on building, as Guidance had instructed us to do. After spending many days of our precious time, we finally made a decision and then spent an entire day choosing a house model, colors of floors, bricks, siding, and my wife was particularly excited about a garden bath tub that she wanted for our bathroom.

After all of this, Guidance said that they would have to run two more credit checks, but they didn’t expect anything to go wrong. After all, I am only one person. How could I have “different” credit, right? It was only then that they started asking for more things: driver’s license number, bank statements, and a multitude of other privacy invading information. But I can understand why they would need that information since they were preparing to enter a contract with us.

Today, the representative called and said that we did not get approved for the promised 100% but that we might instead have to pay a 3% down payment, which would have been about $3,485. My wife and I both cringed. That was exactly the reason why we had not looked for a house with other “Islamic” companies, because they required as much as 20%. Apparently “Sharia-compliant” finance is only for the wealthy. Other Muslims are not qualified. And that was the ultimate outcome. He called again and told us that my credit was apparently even worse than he thought, so we would have to pay 5% or over $5,000.

Now, here is the worst part. I have very little credit. I’ve never owned a credit card, never had a loan. In fact the only thing we have is a car lease, which I had to cosign on because of my lack of credit. Yes, folks, no credit is worse than bad credit. I’d expect such a philosophy from a secular institution. What disturbs me is that Guidance Financial Group claims to be Islamic ,and yet they operate on the same twisted standards. Here they were punishing a fellow Muslim for NOT having entered into interest-bearing loans and credit transactions, which I apparently need in order to be 100% approved for “Sharia-compliant” financing. I will send them this blog post, inshaAllah, and pray that they seek forgiveness for the way they have wronged us. I am sure they will defend their actions, but the bottom line is that they deceived us. They led us to believe one thing and then finally told us another.

The Messenger of Allah (may Allah bless him and grant him peace) said that there are four signs of a hypocrite. If any of them is present in a person, he has a trait of hypocrisy, and if any person has all four, he is a hypocrite.

1. When he speaks, he lies.
2. When he makes a promise, he breaks it.
3. When he enters into an agreement, he violates it.
4. When he has an enemy, he is immoral and unjust to him.

I am not trying to spread (fitna) by making this public, but as I said, people need to know. I am neither recommending nor discouraging anyone to use Guidance Financial, only to warn you of the consequences of believing their sales pitch. If they cannot be honest from the beginning, one must question how reliable they would be as a financial service provider.

May Allah guide us all, including Guidance Financial Group, to worship Him alone and to follow the Sunnah of His Messenger (May Allah bless and grant him and his family peace).


I just spoke with the representative from Guidance, and they clarified one point:

They claim that they are required by law to do only one credit report and that they cannot do the other two until they have an application for a house.

My problem with that is that they are still basing their entire trust of another Muslim on an already flawed system. That system relies on credit reporting done by companies that charge interest and determine someone’s “good credit” based on how well they manage their interest.

I asked him if their trust of me is based solely on that credit report. He said, “We have to base it on something.”

Indeed they do. Why not base it on what Allah has revealed? I have lived in the U.S. all my life. I have no criminal record. I’ve had a steady job for 6 years. I’ve paid rent on various apartments and have never been late for 7 years. I have a family, two cars, insurance, and I’ve never caused a car accident. There are plenty of honest, just ways of determining if someone is reliable. They chose to rely on an unjust system, and I therefore stand by what I have said.


  1. as salaam alaykum,

    This sounds like pretty normal finance company stuff to me. I had almost the exact same experience when purchasing our home. They lie and mislead and mislead and lie to get your business. It’s a dirty business, at this point I’ve stopped expecting Muslims to behave differently from anyone else regardless of their words.

  2. Salaam:
    Unfortunately, it is all too common to use such tactics. I would have expected better from a Muslim, but inshallah, you get what you have asked for, and without having to deal with such people.
    The system itself is unfair, which is why I prefer to cut them out and deal directly with the home seller if possible. Some will assume a mortgage if they like the people.
    May Allah guide you rightly in the matter and in all things

  3. […] My take on all of this has been that these are clearly issues of venue, and to try and apply islamic finance methods in the context of a regulations that support and interest-based economy is, even though possible, not the most feasible thing to do, and seems to be costing Muslims alot more than it should (well those that can afford for it to cost them, as many “Islamic” outlets will not pre-approve the average muslim who does not have credit, no not bad credit, but zero credit, meaning he/she decided to stave the plastic, get a checking account and pay in cash when possible. for an example look here) […]

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  6. assalaamu’alaikum, i have filed a complaint with Better Business Bureau about Mis-Guidance Financial.
    let me tell you what happened what the guidance agent put me through.
    we locked the “profit” rate at 5.25% in mid-dec, paid a $350 fee for that. (just fyi, this fee is non-refundable meaning if you cancel you will lose it, but if you end up completing the refinance transaction with them, it goes towards “closing costs”, which is standard industry practice).
    other conventional (non-islamic lenders) typically give you 60 days to close at the rate you locked.

    guidance only gives 30 days (this is even though they are clearly in need of clients/accounts).

    when the appraisal ($450) was done of the house, the appraiser pointed out a small leaking problem in basement, and the underwriter (insurer for guidance) wanted us to fix it, and the agent told us we had to get an estimate on how much to fix the leak, and then they would hold 1.5 times the amount of the estimate from the refinance cash-out (because there is equity in the property, its worth $350,000, we owe $180,000, so equity amount = $350k – $180k = $170,000. guidance allows cash out up to $30,000. (by the way, they already tried to lay me off at ibm, but one account i supported fought to keep me on, so first round we won, but there’s a second round coming, thats why i need the cash out in case i become unemployed).

    there was a huge snowstorm end of dec (worst in seattle in 40 yrs) that ended 1st week of jan, and after that there was flooding. we could NOT get any contractor to come out to give an estimate under end of 1st week of jan. then we found one honest contractor who came out and did some initial testing work, but after that he rescheduled twice because he had customers with flooding problem he had to fix.

    meanwhile, guidance agent told me on 1/7 that rate will expire on jan 13 unless we extend, and i said ok we have to extend, and he replied he will help me extend for a “negligible fee”. on 1/7 also, i specifically asked him (this is all in writing/email), when is the deadline to complete the repairs, and he replied (in writing) : “no deadline. you do your due diligence, and i’ll do mine”.

    we finally sent him estimate on 1/27. we scheduled with the contractor to do the repair in 2 stages, but he is a one-man service, so he couldn’t schedule the work right away.

    then, on 1/29, agent emailed to say, rate will expire on feb 13, and if we don’t complete the repairs by 2/13, it will cost more to extend. in that email, he told me that he had charged us a “discounted” fee of $667.50 to extend the rate from jan 13 to feb 13, and that it would cost us more to extend from feb 13 to mar 13 (in the event the work could not be completed by feb 13). the scale of fees was $512 for 5 days extension, $717 for 10 days extension, $922 for 15 days, and $1,127 for 30 days!!!

    i understand that islam does not limit “profit”, but not only are the fees OUTRAGEOUS, and other lenders have confirmed to me that they dont charge such fees, they give you 60 days for the rate, then after that something like $500 for 30 days extension.

    i flipped out then. i disputed with the guidance agent : first, he NEVER told us work had to be completed by feb 13, i have numerous emails from him asking for estimate only, and never once did he say work had to be completed by feb 13 (or i would have rushed the contractor or found another one); second he said he would extend to fe 13 at “negligible” fee, and i dont consider $667.50 to be “negligible”. he also never communicated with us the fee amount, to ask for our agreement since it’s so high, and i reminded him quran says to enter into contract in writing with witnesses.

    i have filed a complaint with the area Better Business Bureau. i cannot have compassion on them, because they never had compassion on me. i even contacted the CEO kal elsayed once, and asked why cant he post the “profit” rates on their website like other lenders post their “interest” rates on their website. his reply was : not in the budget. i know for a fact it is NOT a big deal to calculate your “profit” rate daily and then post on website. you just need one dedicated person to do that.

    they just dont want to do it, and once as a test, i emailed this agent (who is in VA) to ask for the rate that day, and emailed the seattle agent for same info, and both came back with different rates! its like these muslim grocery stores, they dont post price of their halal meat, and this actually happened to me, they would give one price to one person, another price to another person, and sadly, they are always favoring their “brother” friends.

    oh, and i forgot to mention that this agent lied to my roommate. he told her we should refinance now because they may pull out of state of WA in mar because they say the operating costs are too high (btw, guidance is one of 2 lenders that showed profit in 2008). later, when she asked him again, he said he never told her that, and she was like, “a’uudzubillah”, and then he quickly changed his position, and said “i only told you that because you’re a special customer”. his speech is like a used car salesman.

    since he lied once, we stopped communicating with him with phone, we insisted all communication to be in writing.

    may allah guide them!

  7. May Allah Guide all in this world.

    I am really surprising to hear about Guidance which is hard to believe because I finance twice with them and had excellent experience. also I know lots of friends who financed with Guidance and never heard anything bad and all are happy customer and always recommend others to finance with Guidance.
    May All Guide us!

  8. Br. Imran Ahmed,

    I hope You are not one of their employees. I have some personal experience with G.F and Have heard many stories bout, How they are taking advantage of being So called” close to shariah compliant”.
    May Allah Protect us all from Hell fire.

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