TikTok is Generation Z’s preferred platform to Google for searching for answers and hacks, from cooking tips to personal money tips.
Right now, more than a third of Generation Z turn to TikTok for financial advice. And while it’s nice to see more young people seeking money advice, you can’t trust all the advice these “FinTok” accounts offer.
In fact, some may even cause legal problems.
We spoke to an attorney and a credit counselor who have seen firsthand what can happen when people listen. Here are some TikTok money tips that can put you in financial and legal hardship.
Anyone can claim to be an “expert” on TikTok
Michelle Creeden and David A. Gelinas work for the National Legal Center, where they help people cope with credit and debt problems. Creeden is a licensed attorney to practice law in New Hampshire and is well versed 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 have 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,” Creeden said. “I see a lot of clients that 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 how I refer to it. . ”
According to Gelinas, FinTokers tend to provide a lot of general information. Such advice does not consider the level of risk to the viewer or how severe their financial situation may be. It can also skip some important details.
“It can easily get someone into trouble,” he said.
For example, one of Creeden’s clients saw TikToks on the snowball debt repayment method. It is a popular strategy for getting rid of credit card debt that suggests paying the cards with the lowest balances first to keep yourself motivated.
Here is just an example of @thecreditbrothers’ TikTok on the snowball method:
The easiest way to pay off credit card debt: the debt snowball method
♬ original sound – Credit Brothers
The creator said nothing wrong, and thisit works for many people. However, @thecreditbrothers, like many others on FinTok, doesn’t mention that you have to keep paying all other debts as well.
“Not everyone realizes that,” Creeden said. “If you’re following a piece of information or advice without really understanding the whole pattern, it can really cause problems. So I have [a client] who decided to follow the advice to pay the smallest balance first. And so she stopped paying taxes and student loans. ”
This caused immediate problems. As a result, the person who was simply trying the snowball method had to seek Creeden’s services.
The same creator, @thecreditbrothers, offered another common tip on the debt management platform:
@thecreditbrothers Have you ever paid a debt collection agency? # credithacks # creditrepair # credittips # debtcollector # debtcollection ♬ original sound – Credit Brothers
Another of Creeden’s customers decided to give it a try.
“They didn’t have any plans on how to deal with the debt or how to minimize the risk,” Creeden said. “Then they came to us after they were sued for multiple debts. And they just didn’t have a plan. Nothing.”
Creeden’s client didn’t think a plan was needed. They were just followingon TikTok it seemed simple enough. However, according to Creeden, the advice was given with no explanation of the risks and led to a kidnapping that Creeden had to help fight.
Legal advice on TikTok is particularly dangerous
Things can get even more dangerous when TikTokers provides advice that veers into legal territory.
For example, this TikTok from @ksmithcredit talks about the amount of time it takes 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 by state and the risks mentioned do not apply in all states. For example, wages are not foreclosed for collection cases in Texas, South Carolina, and a few other states.
“Scaring people into presenting answers in all situations makes no sense and can cost money,” said Creeden. “Filing fees can be high: $ 400 in some courts.”
This TikTok from @thedisputeher suggests you remove your valid addresses from your Experian credit report:
@thedisputeher This credit hack will help you take negative accounts out of your credit # experianbackdoor # creditrepairhacks # creditrepair # pushinp🅿️ ♬ pushin P (feat. Young Thug) – Gunna & Future
The idea is that the credit department will also remove the negative accounts associated with those addresses. However, credit bureaus will not delete accurate information. Furthermore, even if this “hack” works, you risk losing even the positive information related to the removed addresses. So accepting this advice may still end.
TikTok creator @epiccreditscore offers legal advice in all states, despite states having 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 length 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’s true [statute of limitations] it’s an important aspect, “Gelinas said.[But] it’s not always that simple. “According to him, the best practice is for a state lawyer to look into the case, as it can often be very complicated.
“I don’t recommend to people outside of the area where I am able to practice,” Creeden said. “When people who are not lawyers do so in all states, they are more likely to give wrong information.”
The consequences, he said, can be severe and can impact wages and credit.
How to find useful TikTok money tips
Does this mean you should never turn to TikTok and social media for financial advice? Not necessarily.
Both Creeden and Gelinas agree that there are benefits to browsing FinTok money tips. Creeden acknowledges that he appreciates using TikTok and finds some incredibly positive and useful FinTokers: @travelcreditoacceptablefor example, it is someone who follows and appreciates.
@journeycreditacceptance 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 that accessible.
“My generation didn’t know much about credit or debt or … how to invest,” Creeden said. “You know, those aren’t things we discussed in school.”
Today, social media is changing that. Young people can familiarize themselves with these topics simply 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 stay alert.
There is no official entity that monitors TikTok to see if the creators offer sound financial advice. The Consumer Financial Protection Bureau will not deal with FinTokers offering inaccurate information. It is up to you to choose which advice to trust.
Gelinas recommends being “very diligent … and very insightful”. If you find TikTok money tips you want to try, check them out on multiple sources. Learn more about the topic to learn more about it before taking any action. 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 finance is always too personal. What works for others may not apply to your situation, especially if you are having financial problems. When you are in a crisis, it is best to seek help from a professional. You shouldn’t (or at least you shouldn’t) go to TikTok for medical advice on a serious health issue. It is smart to treat your financial health the same way.