Even in the best of times, it can be hard to tell the difference between honest error and outright deception. If a company misses its quarterly earnings number by a mile, it's because of "unforeseen circumstances." When a public offering touted as a sure thing corkscrews into the ground, the analysts who pumped it up cite "poor market conditions." And when top executives of the late Lehman Brothers assured analysts that the bank's "capital situation was strong," even as they desperately sought money to avoid bankruptcy, C.E.O. Dick Fuld blamed an "extraordinary run on the bank" for giving him the lie. So how can you tell when you've gone from being mistaken to being simply taken?
    
Todd Robbins spent years in the company of Southern California's most successful grifters—as he puts it, "the ones who were good enough to get old instead of getting caught." Though they groomed him to play the role of "roper," the guy who identifies marks and gets them to lower their guard before delivering them to the shakedown specialists, Robbins instead chose to demystify the profession, producing a series of DVDs, books, and live shows detailing the art of the scam.

Stan Walters, a "deception specialist" who's worked for the Department of Defense and several law-enforcement agencies, says that asking con men how to detect lies makes good sense. Over the course of his career, Walters has videotaped hundreds of interviews and shown them to people from all walks of life to evaluate; he found that prison inmates can catch more than two-thirds of the lies, compared to about half for the general populace. "No one's better at spotting deception than a criminal," says Walters.

According to Robbins, there are a few key principles to keep in mind to prevent you from falling for a line of bull.
The heart of any swindle, notes Robbins, is human greed. Con men play on the desire to get something for nothing—offering an unfair advantage (insider information, below-market pricing, an illicit edge) that a "mark" simply can't resist.

"Generally, if someone's trying to rip you off, he's not taking you anywhere you don't already want to go," says Robbins. "The con man shares news of an opportunity, and the mark is the one who ends up demanding to get in on it." This dynamic is often set up by a variation of the classic hard-to-get ploy where the deceiver sets up challenges for the deceived to make an offer seem more attractive. So if you've been made to jump through hoops to "qualify" for an opportunity and now find yourself chomping at the bit to do or believe something, step back and consider your motives before forging ahead.

Walters adds that you should be particularly wary of situations where someone starts by asking for a small favor or task, taking advantage of your willingness to trust them, but then gradually escalates the level of commitment.

"Each step gets you deeper into the lie, until you're all in," he says.

When a vendor compliments you on your savvy negotiation skills and offers you a once-in-a-lifetime, only-for-preferred-customers deal, rest assured that she'll be laughing at you all the way to the bank.

That's an example of what Robbins calls "mirroring"—using flattering statements to lift a listener's confidence in himself ("You're such a great judge of character!"). Confidence is, after all, where the con in con man comes from. The sharper someone makes you think you are, the more likely you are to believe that you're in control—and the more vulnerable you'll be when the loop of deception is closed. "The easiest person to con," says Robbins, "is someone who thinks he's too smart to be conned."

Walters agrees wholeheartedly, noting that "when we do interrogations, we find that in many cases, the more intelligent and confident the subject is, the easier it is, ironically, to take them down."

When all else fails, and you're really not sure whether someone's words should be trusted, Robbins suggests using the universal guideline behind understanding the dynamics of any business transaction: Follow the money. When you're trying to figure out if someone's deceiving you, it's critical to assess who wins and who loses if the proposition proves untrue, and by how much: Only pathological types will lie with no hope of gain, but the chance of an assertion gets bigger as the potential reward for lying rises and the consequences for being caught shrink. "Simply put, if someone has nothing to gain by telling a lie, chances are it's the truth," he says. "If it's obvious that he has something to gain, watch out."

This means being particularly skeptical of statements made by analysts whose firms may benefit from having them recommend certain stocks, for example, or C.E.O.'s trying to reassure investors to save their companies.

Walters agrees. "You look at the three major types of 'big' lies, which I call the Three H's: Hide, Hype, and Harm," he says. "People will lie to hide an indiscretion; people will lie to hype their own accomplishments; and people will lie to hurt someone or something that they want to exact vengeance on. All lies are ultimately motivated by gain, and the bigger the potential for gain, the bigger the lie."

And with the economy in its current state, both Robbins and Walters suggest exercising additional caution. Noting that statistics show spikes in bank fraud, personal-credit scams, and other financial misdeeds during downturns, Walters advises that businesses embrace Ronald Reagan's old line about nuclear arms treaties—"trust, but verify."

"In tough economic times, you have more and more people out there who are desperate," says Robbins. "Businesses and individuals get to a point where they already figure they're losing everything—they'll do and say things that they wouldn't do otherwise."

"It's a sad thing to say," Robbins adds, "but lying is a recession-proof business."