Gen Z uses TikTok on Google for daily information searches. It’s easy to see why: if you’ve ever lost track of time scrolling through your For You page, you know you can find advice on just about anything under the sun, including money.
More … than a third of Gen Z turn to TikTok for financial advice. While more young people seeking financial advice indicates a positive trend in financial literacy, the problem is that some of that advice might not be accurate.
And some can even lead to legal issues.
We spoke with a lawyer and a credit counselor who saw firsthand what can happen when people listen. Here are the “FinToks” that can get you in trouble – and tips for avoiding bad financial advice on social media.
The devil is in the details
Michelle Creeden and David A. Gelinas work for the National Legal Center where they help people struggling with credit and debt problems. Creeden is an attorney licensed to practice law in New Hampshire and is experienced in consumer and debtor law. Gelinas has over 20 years of experience in credit counseling, non-profit debt management and debt resolution.
Both have helped clients who were unlucky enough to follow bad financial advice on TikTok.
“There are a lot of people who are going to teach you things that they don’t fully understand,” Creeden said. “I see a lot of customers who will bring me or send me links… and that’s really terrible advice from someone who might have known a little bit of information – just enough to be dangerous, it’ is how I refer to it.”
According to Gelinas, FinTokers tend to give away a lot of background information. This advice does not take into account the level of risk to the viewer or the seriousness of their financial situation. It may also ignore some important specifics.
“It can easily get someone in trouble,” he said.
For example, one of Creeden’s clients saw TikToks on the snowball debt repayment method. It’s a popular strategy for getting rid of credit card debt that suggests paying off the cards with the lowest balances first to stay motivated.
Here’s just an example from @thecreditbrothers’ TikTok on the snowball method:
The Easiest Way to Pay Off Your Credit Card Debt: The Debt Snowball Method
The creator said nothing wrong, and thatworks for many people. However, @thecreditbrothers, like many others on FinTok, fails to mention that you must continue to pay all your other debts as well.
“Not everyone realizes that,” Creeden said. “If you follow a piece of information or advice without really understanding the whole scheme, it can really cause problems. So I had to [a client] who decided to follow the advice to pay the smallest balance first. And so she stopped paying her taxes and student loans.”
This, of course, caused immediate problems. As a result, the person simply trying the snowball method had to hire the services of Creeden.
The same creator, @thecreditbrothers, offered another extremely common tip on the platform regarding debt management:
@thecreditbrothers Have you ever paid a debt collection agency? #credithacks#creditrepair#credittips#collection agent#Debt recovery♬ original sound – Credit Brothers
Another Creeden customer decided to give it a try.
“They had no plan on how to manage debt or minimize risk,” Creeden said. “Then they came to us after being sued for multiple debts. And they just had no plan. Nothing.”
The Creeden client didn’t think a plan was necessary. they had just followedon TikTok it seemed simple enough. However, according to Creeden, the advice was given without any explanation of the risks and resulted in a garnishment which Creeden had to help fight.
TikTok, where everyone is a lawyer
Things can get even more dangerous when TikTokers provide advice that strays from legal territory.
For example, this TikTok from @ksmithcredit talks about how long you have to respond to a collection suit:
@ksmithcredit Here is the first thing you need to do.. #credit#collections#court case#gotservi♬ original sound – Kenneth Smith Jr
However, response windows vary by state and the risks mentioned do not apply to all states. For example, wages are not garnished for collection cases in Texas, South Carolina, and a few other states.
“Scaring people into filing answers in every situation doesn’t make sense and can cost money,” Creeden said. “The filing fee 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 eliminate negative accounts from your credit #experianbackdoor#creditrepairhacks#creditrepair#pushinp🅿️♬ pushin P (with Young Thug) – Gunna & Future
The idea is that the credit bureau will also delete negative accounts associated with these addresses. However, the credit bureaus will not remove accurate information. Moreover, even if this “hack” works, you also risk losing the positive information related to the deleted addresses. So following this advice could still end up.
TikTok creator @epiccreditscore offers legal advice in all states, although states have different laws.
In this TikTok, the creator suggests using the “time bar” defense (referring to how long 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 that [statute of limitations] is an important aspect,” said Gelinas. “[But] it’s not always that simple. According to him, the best practice is for a state attorney to review the case, as it can often be very complicated.
“I don’t advise people outside of the area I’m able to practice in,” Creeden said. “When people who aren’t lawyers do it in every state, they’re more likely to give the wrong information.”
The consequences, she said, can be serious and can impact your wages and your credit.
“Be very demanding”
Does that 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 financial advice on FinTok. Creeden admits to enjoying using TikTok and finds some incredibly positive and helpful FinTokers: @voyagecreditacceptationfor example, is someone she follows and likes.
@voyagecreditacceptation The truth about credit karma #BbStyleFearlessly#MACChallengeAccepted#GetTheWChallenge#finance#fyp#fypシ#creditscore#credit#finance#moneytok#for you#credit report#mortgage#car#automatic loan#bank#creditrepair♬ original sound – Journey To Credit Acceptance
Also, before the days 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 discussed at all in school.
Today, social media is changing that. Young people can familiarize themselves with these topics just by scrolling on TikTok. They can learn important financial terms and gain an understanding of money basics. All they need to do to protect their wallet is stay alert.
No official entity monitors TikTok to check whether the creators are offering sound financial advice. The Consumer Financial Protection Bureau will not go after FinTokers who offer inaccurate information. It’s up to you which advice to trust.
Gelinas recommends being “very diligent…and very perceptive”. If you find financial advice on TikTok that you want to try, check it out with several sources. Dig to do a thorough research on the subject before taking action. It’s also a good idea to take a closer look at the creator. Are they a recognized expert on the subject? What credentials do they have to prove it?
Remember that personal finances are also always personal. What works for others may not apply to your situation, especially if you are struggling financially. When you’re in crisis, it’s best to seek professional help. You won’t (or at least shouldn’t) go to TikTok for medical advice about a serious health condition. It’s smart to treat your financial health the same way.