How to Avoid Getting Taken

Got an extra $1,000 you can afford to drop in ye ole document shredder? No? Well, then you better know how to identify and protect yourself from fraud in all its many guises.

According to the National Fraud Information Center, in 2002 the average telemarketing scam cost a person $845 while an Internet scam cost a "mere" 486 bucks. It adds up, folks.

Whether by phone, snail mail, or the Internet, these tantalizing scams just keep coming. It's easy to delete or throw away the offers for MALE ENHANCEMENT or a full head of hair, but what about the ones that promise free vacations, free money, or free credit? Even the most hard-bitten skeptics imagine themselves sunning in a tropical location or eating bonbons while everyone else they know goes off to work.

Here's a short list of some of the most seductive scams:

Credit Card: Phony credit card offers have surpassed prizes and sweepstake scams as the #1 telemarketing fraud. Scammers target those who have money "issues" and often ask for payment up-front by arranging to debit your bank account. Oh, how convenient.

You might want to keep the following in mind before you respond to a solicitation that offers easy credit no matter what your history:

• Legitimate lenders never offer "guarantees" before you apply, especially if you have bad credit, no credit, or a bankruptcy.
  
  
• Never give your vital information over the phone or through email unless you are very familiar with the company and know why they are asking for it.
  
  
• Never pay a dime if you don't have the offer in hand or confirmed in writing. Without the goods, it's definitely fraud.

Work at Home: Who wouldn't want to work at home? All day in your PJs. Endless access to the fridge. Make sure it's not one of the following scams:

• Think stuffing envelopes is big business? Think again: The only money made is on the scammer's side. Who do you think pays for all the envelopes and rubber cement: (Hint: You.)
  
  
• You'll be told that there is a "crisis" in the health-care system that looks a lot like piles of paper that need processing. Problem is, you'll have to drum up your own business only AFTER you pay $2,000 to $8,000 up-front for the materials you'll need to get started as a medical billing professional.
  
  
• You'll make aprons, or plastic signs, or some such thing. You'll pay up-front for materials (starting to get the picture?), and then the company will say what you've made isn't up to snuff and you're left holding the bag or apron or whatnot.

Vacation Deals: "You've recently been selected to receive our SPECTACULAR LUXURY DREAM VACATION FREE!" Sound familiar? Although these scams fill up your email inbox, you'll often get them over the phone, too. Beware of these tactics:

• The too-good-to-be-true deal: While there are various schemes out there, the common denominator is the promise of a "deal" they can't possibly deliver. Thing is, you won't know until your money is gone.
  
  
• The act-now-or-lose tactic: If someone calls you and says, "You have to buy immediately because they are going like hotcakes," that's a pretty good sign it's a scam. Also, be on the lookout for vague answers to your legitimate questions.
  
  
• The "affordable" approach: Travel telemarketers will also pitch a club membership or vacation offers in a more reasonable price range. The result, however, is the same as the "too-good-to-be-true" offer, so make sure you have information in writing before you join the club.
  
  
• The contradictory-follow-up-material scam: Sure, they agree to send you written confirmation, but it usually looks nothing like the one you accepted over the phone and typically discloses additional terms, conditions, and costs. The bottom line here is: Read the fine print and never, ever pay up-front costs.

Don't despair. We know it's vacation season, and you want to get out there for less. CBSMarketWatch recently offered some tips for how to exploit these offers. So, if you're tempted by all the timeshare invitations you're receiving (you know, the ones where they offer you a discounted price just for checking out their digs), just make sure of a few things before you go: (1) Know who you're dealing with; (2) Make sure you know what's required of you before you go; and (3) Don't sign anything.

Just say no!
But what if you're just sick and tired of having your mailbox crammed with unsolicited mail? Fed up with getting telemarketing calls? Fuming that your email inbox is full of empty promises? Lucky for you the Federal Trade Commission has compiled a list of things you can do to "just say no."

Credit Bureaus: Call 1-888-5-OPTOUT (567-8688) to "opt out" of having pre-approved credit offers sent to you for two years.

Direct Marketing: The Direct Marketing Association offers the Mail and Telephone Preference Services, which allow you to reduce the amount of direct mail marketing and telemarketing you receive from many national companies for five years. You'll need to send a letter to:

For direct mail: Direct Marketing Association; Mail Preference Service; P.O. Box 643, Carmel, NY 10512 .

For telemarketing: Direct Marketing Association; Telephone Preference Service; P.O. Box 1559, Carmel, NY 10512.

For email: To "opt out" of receiving unsolicited commercial email (good for one year), use the Direct Marketing Association's online form at e-mps.org.

Perhaps it's now time to address the proverbial elephant in the room. Why on earth do any of us fall for, or even read, these ridiculous offers? Is it because we've watched too many episodes of Lifestyles of the Rich and Famous? Is it because it's hard to remember what your Momma taught you about what's important in life when someone offers you instant access to millions of dollars or a full head of hair?

The point is, it might be helpful for us all to take a little advice from Michael Jackson and start with "The Man In the Mirror." An introspective look at why we believe it's possible or worthwhile to "get rich quick" or go on a "fabulous vacation for FREE" or "earn millions working at home" might just keep us from making the same mistakes twice (or, God forbid, thrice) and save us a lot of time and money.

So, rather than looking for the quick fix, why not start thinking long term and begin investing? You can do it automatically a little at a time with a Drip account or, my favorite, the money-saving, no-nonsense way: a low-cost index fund.

For near-term goals like, say, a fabulous vacation, a short-term savings account is the way to go. After all, think of how satisfying spitting into the Grand Canyon is going to be when you know you got there the old-fashioned way: You saved for it.

Kristin Garrison is a longtime Fool who's fallen for as many scams as we can throw at her. The Motley Fool is investors writing for investors .