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I would say that the first and most effective way to deal with this issue is to be careful to live and conduct oneself in such a manner that either gossip will not start, or (if it does start out of pure malice on the part of others) it will not be believed by those who hear it. Secondly, I would say that a Christian should not "retaliate in kind" against such activity, but, where possible, should speak privately with the person or persons who originated the false reports (Matthew 18:15) and attempt (even if the effort proves unsuccessful) to come to an understanding with them. If that is not possible, perhaps there is a mutual third party who thinks well of you, and whom the person(s) doing the gossiping would also respect, who can intervene on your behalf in a manner which the gossiper will listen to and heed. Ultimately, however, beyond the above steps, it does not appear to me that a Christian can control what others say. I would say that the Christian should then take them to God in prayer, and make every effort (with God's help) to remove anxiety or worry about them from the Christian's life, enlisting the help and support of other Christians in that regard, as available and/or necessary.
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