This story is part ofhelping you make the most of your technology, home and health during the holiday season.
TikTok is good for several things: niche memes,and dance routines, for sure. But you may want to look elsewhere when looking for financial advice. Risk money advice abounds online – but social media makes it even easier to come across dodgy strategies that claim to help you save money.
With more than a third of Gen Z turning to TikTok for financial advice, avoiding advice that seems too good to be true is crucial. Following bad money advice can not only cost you financially – in some cases it can land you in legal trouble.
We spoke to an attorney and credit counselor who have seen firsthand what can happen when people listen. Here are some TikTok money tips that can land you in financial and legal trouble.
Anyone can claim to be an “expert” on TikTok
Michelle Creedon and David A. Gelinas work for the National Law Center, where they help people dealing with credit and debt issues. Creedon is an attorney licensed to practice law in New Hampshire and has experience in consumer and debtor rights. Gelinas has over 20 years of experience in credit counseling, non-profit debt management and debt resolution.
Both have helped clients who had the misfortune of following the wrong financial advice on TikTok.
“There are a lot of people who will teach you things they don’t fully understand,” Creedon said. “I see a lot of clients who will bring me or send me links … and it’s really just terrible advice from someone who may have known a little bit of information — ‘enough to be dangerous’ is what I call it. ”
According to Gelinas, FinTokers tend to give a lot of general information. Such advice does not take into account the level of risk to the viewer or how dire their financial situation may be. It may also miss some important specifics.
“It could easily get someone in trouble,” he said.
For example, one of Creeden’s clients saw TikToks about the snowball method of paying off debt. This is a popular strategy for getting out of credit card debt that suggests paying off the cards with the lowest balances first to stay motivated.
To learn more about saving money this holiday season, read aboutwith these simple tricks.
Here’s just one TikTok example from @thecreditbrothers on the snowball method:
The Easiest Way to Pay Off Your Credit Card Debt: The Debt Snowball Method
♬ original sound – Credit Brothers
The creator has not said anything bad and thatworks for many people. However, @thecreditbrothers, like many others at FinTok, fail to mention that you still need to keep paying all your other debts.
“Not everyone realizes that,” Creedon said. “If you follow information or advice without really understanding the whole scheme, it can really cause problems. So I had [a client] who decided to follow the advice to pay the smallest balance first. And so she stopped paying her taxes and her student loans.”
This caused immediate problems. As a result, the person who was just trying out the snowball method had to seek Creeden’s services.
The same creator, @thecreditbrothers, offered another piece of advice that’s common on the platform about dealing with debt:
@thecreditbrothers Have you ever paid a debt collection agency? #credithacks#creditrepair#credittips#debtcollector#debtcollection♬ original sound – Credit Brothers
Another one of Creeden’s customers decided to give it a try.
“They didn’t have any plan on how to deal with the debt or how to minimize the risk,” Creedon said. “Then they came to us after being sued for multiple debts. And they just didn’t have a plan. Nothing.”
Creedon’s client did not think a plan was necessary. They just followed himon TikTok it seemed simple enough. However, according to Creedon, the advice was given without any explanation of the risks and resulted in a foreclosure against which Creedon was supposed to help.
Legal advice on TikTok is particularly dangerous
Things can get even more dangerous when TikTokers provide tips that cross into legal territory.
For example, this TikTok from @ksmithcredit talks about the time frame you have to respond to a collection lawsuit:
@ksmithcredit Here’s the first thing to do.. #credit#collections#lawsuit#gotserved♬ original sound – Kenneth Smith Jr.
However, response windows vary by country and the risks mentioned do not apply in all countries. For example, wages are not garnished for collection cases in Texas, South Carolina, and several other states.
“Scaring people into submitting answers in all situations makes no sense and can cost money,” Creedon said. “Filing fees can be high — $400 in some courts.”
This TikTok from @thedisputeher suggests removing your valid addresses from your Experian credit report:
@thedisputeher This credit hack will help you remove negative accounts from your credit #experianbackdoor#creditrepairhacks#creditrepair#pushinp🅿️♬ pushin P (feat. Young Thug) – Gunna & Future
The idea is for the credit bureau to also remove negative accounts associated with these addresses. However, credit bureaus will not delete information that is accurate. Plus, even if this “hack” works, you risk losing the positive information associated with the removed addresses as well. So taking this advice may still work out.
TikTok creator @epiccreditscore offers legal advice in all states, although states have different laws.
@epiccreditscore#lawsuit#olddebt#debt#served#court#creditrepair♬ original sound – Jla
In this TikTok, the creator suggests using the “statute of limitations” defense (referring to the period of time the company has to take legal action against you) if a collection agency sues you. This common legal tactic is common advice on TikTok, but it’s also misleading.
“It is true that [statute of limitations] is an important aspect, Gelinas said.[But] it’s not always that simple.” He says the best practice is to have a state attorney review the case because it can often be very complex.
“I don’t advise people outside of the area in which I can practice,” Creedon said. “When people who are not lawyers do it in all the states, they are more likely to give the wrong information.”
The consequences, she said, can be severe and affect your wages and credit.
How to find useful money tip on TikTok
Does this mean you should never come to TikTok and social media for financial advice? Not necessarily.
Both Creedon and Gelinas agree that there are benefits to looking at money advice on FinTok. Creeden admits he enjoys using TikTok and finds some FinTokers incredibly positive and helpful: @journeycreditacceptancefor example, is someone she follows and values.
@journeycreditacceptance The Truth About Credit Karma #BbStyleFearlessly#MACChallengeAccepted#GetTheWChallenge#finance#fyp#fypシ#creditscore#credit#finance#moneytok#foryou#creditreport#mortgage#auto#autoloan#bank#creditrepair♬ original sound – Journey To Credit Acceptance
Plus, before the days of financial influencers, money advice wasn’t as accessible.
“My generation didn’t know much about credit or debt or … how to invest,” Creedon said. “You know, these aren’t things we discussed at school at all.”
Today, social media is changing that. Young people can learn about these topics just by scrolling through TikTok. They can learn important financial terms and gain an understanding of the basics of money. All they have to do to keep their wallets safe is to stay alert.
There is no official body monitoring TikTok to verify that creators are offering valid financial advice. The Consumer Financial Protection Bureau will not prosecute FinTokers who offer inaccurate information. It is up to you to choose which advice to trust.
Gelinas recommends being “very diligent…and very perceptive.” If you find a TikTok money tip that you want to try, check it out on multiple sources. Do your research to fully research the subject before taking any steps. It’s also a good idea to take a closer look at the creator. Are they recognized experts on the subject? What credentials do they have to prove it?
Remember that personal finances are always too personal. What works for others may not be applicable in your situation, especially if you are experiencing financial problems. When you’re in a crisis, it’s best to turn to a professional for help. You wouldn’t (or at least shouldn’t) go to TikTok for medical advice about a serious health problem. It’s smart to treat your financial health the same way.