This story is part of 12 days with tipsthat helps you make the most of your technology, home and health during the holidays.
TikTok is good for several things: niche memes, butter slabs and dance routines, sure. But you may want to look elsewhere when looking for financial advice. Risky 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 one-third of Gen Zers turning to TikTok for financial advice, it’s crucial to avoid tips that seem too good to be true. Following bad financial advice can not only cost you financially – in some cases it can land you in legal trouble.
We spoke to a lawyer and credit counselor who saw firsthand what can happen when people listen bad advice about making money on TikTok. 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 Creeden and David A. Gelinas work for the National Law Center, helping people dealing with credit and debt issues. Creeden 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 bad financial advice on TikTok.
“There are a lot of people who will teach you things they don’t fully understand,” Creeden said. “I see a lot of clients who bring me or send me links… and it’s really just terrible advice from someone who might have known a bit of information – ‘just enough to be dangerous’ is what I say. ”
According to Gelinas, FinTokers tend to provide 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 skip over some important specifics.
“It can easily get someone in trouble,” he said.
For example, one of Creeden’s clients saw TikToks about the snowball method of paying off debt. It’s a popular strategy for getting out of credit card debt that recommends paying off the cards with the lowest balances first to keep you motivated.
To learn more about how to save money this holiday season, read about how to save on daily necessities with these simple tricks.
Here’s just one TikTok example from @thecreditbrothers about the snowball method:
The Easiest Way to Pay Off Credit Card Debt: The Debt Snowball Method
♬ original sound – Credit Brothers
The creator didn’t say anything bad and this debt repayment strategy it works for many people. However, @thecreditbrothers, like many others on FinTok, fail to mention that you still need to continue paying all your other debts.
“Not everyone realizes that,” Creeden said. “If you follow some information or advice without really understanding the whole scheme, it can really cause problems. [a client] who chose to follow the advice of paying the smallest balance first. And so she stopped paying taxes and student loans.”
This caused immediate problems. As a result, a person who was simply trying the snowball method had to seek out Creeden’s services.
The same creator, @thecreditbrothers, offered another piece of advice common on the platform for dealing with debt:
@thecreditbrothers Have you ever paid a debt collection agency? #credithacks#creditrepair#credittips#debtcollector#debtcollection♬ original sound – Credit Brothers
Another of Creeden’s clients decided to give it a try.
“They had no plan to deal with the debt or to minimize the risk,” Creeden said. “Then they came to us after being sued for a lot of debt. And they just had no plan. Nothing.”
Creeden’s client didn’t think a plan was necessary. They just drove credit counseling it looked easy enough on TikTok. However, according to Creeden, the advice was given without any explanation of the risks and resulted in a foreclosure that Creeden had to help fight.
Legal advice on TikTok is particularly dangerous
Things can get even more dangerous when TikTokers give advice that veers into legal territory.
For example, this TikTok by @ksmithcredit talks about the time frame you have to respond to a collection lawsuit:
@ksmithcredit Here’s the first thing you need to do.. #credit#collections#lawsuit#gotserved♬ original sound – Kenneth Smith Jr
However, response windows vary from state to state and the risks mentioned do not apply in all states. For example, in Texas, South Carolina, and several other states, wages are not garnished for collection.
“Scare people into filling out answers in all situations is pointless and can cost money,” Creeden said. “Filing fees can be high — $400 in some courts.
This TikTok by @thedisputeher suggests you remove your valid addresses from your Experian credit report:
@thedisputeher This credit hack will help you get negative accounts off your credit #experianbackdoor#creditrepairhacks#creditrepair#pushinp🅿️♬ pushin P (feat. Young Thug) – Gunna & Future
The idea is that the credit bureau will also remove negative accounts associated with those addresses. However, credit bureaus will not delete information that is accurate. Additionally, even if this “hack” works, you risk losing positive information tied to the deleted addresses. So taking this advice could still end damage your credit score.
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 amount of time a company has to take legal action against you) if a collection agency sues you. This general legal tactic is common advice on TikTok, but it’s also misleading.
“It is true [statute of limitations] is an important aspect,” Gelinas said.[But] it’s not always that simple.” He says it’s best to have a prosecutor review the case because it can often be very complicated.
“I don’t advise people outside of the area I’m able to practice in,” Creeden said. “When non-lawyers are doing it in all the states, they’re more likely to give the wrong information.”
The consequences, she said, can be serious and can affect your wages and credit.
How to find useful TikTok money advice
Does this mean you should never come to TikTok and social media for financial advice? Not necessarily.
Both Creeden and Gelinas agree that there are benefits to browsing money tips on FinTok. Creeden appreciates the use of TikTok and finds some FinTokers incredibly positive and helpful: @journeycreditacceptancefor example, he is someone he follows and appreciates.
@journeycreditacceptance The truth about credit karma #BbStyleFearlessly#MACChallengeAccepted#GetTheWChallenge#finance#fyp#fyp#creditscore#credit#finance#moneytok#foryou#creditreport#hypotéka#auto#credit loan#original bank#creditour loan on
Additionally, prior to the time of financial influencers, financial advice was not as accessible.
“My generation didn’t know much about credit or debt or … how to invest,” Creeden said. “You know, these aren’t things we even discussed at school.
Today, social media is changing that. Young people can learn about these topics simply by scrolling through TikTok. They can learn important financial concepts and understand the basics of money. All they have to do to keep their wallets safe is to stay vigilant.
There is no official entity that checks TikTok to see if creators are offering valid financial advice. The Consumer Financial Protection Bureau will not come after FinTokers who offer inaccurate information. It’s up to you which advice you believe.
Gelinas recommends being “very diligent… and very demanding.” If you find money advice on TikTok that you want to try, check it out on multiple sources. Please research the topic thoroughly before taking any action. It is also good to take a closer look at the creator. Are they a recognized expert on the subject? What credentials does he have to prove it?
Remember that personal finance is always too personal. What works for others may not work in your situation, especially if you are struggling financially. When you find yourself in a crisis, it is best to turn to an expert for help. You shouldn’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.