You Know What They Say About a Free Lunch

? Phantom riches. Promoters dangle the prospect of great wealth or unbelievable returns. They get people excited about an investment that is guaranteed to produce.

? Source credibility . They try to build credibility with you by claiming to be with a reputable firm or to have special credentials or experience. Often the most basic check will reveal that the promoter isn't licensed.

? Social consensus. They will tell people that other savvy or rich investors have invested in the product. The dialogue might go something like this: "I know it's a lot of money, but I'm in it and so is my mom and half her church, and it's worth every dime."

? Scarcity . The promoter creates a false sense of urgency by claiming that there is a limited supply or that only certain investors are allowed. They try to get you to sign up at the seminar. Don't do it. Always take the time to think about and investigate any offer.

WISE Senior Services in Los Angeles, using a grant from the NASD Investor Education Foundation, analyzed hundreds of transcripts of undercover tapes from these investment seminars. The nonprofit group found more than 1,100 separate instances where influence tactics were used on consumers. The study found that investment fraud, more than any other type of fraud examined, had the greatest variety of pitches. Researchers found the tactics changed depending on the individual.

"Customization of pitches underscores the importance of consumers becoming aware of how their particular psychological characteristics and tendencies are exploited in order to defend against it," the study concluded.

In other words, you've got to know your weaknesses. If you're not the type of person who likes to ask questions, don't go to one of these seminars alone.

Here's something else to think about that the investor fraud study found: You make yourself more vulnerable by your willingness to attend a "free" seminar on investing.

The fact is it's not enough to trust that you will spot a fraud just because you know the old adage: "If it's too good to be true, it probably is." That warning is useless because the con men and women are so good at making something that sounds too good seem so true.

? On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.She also has a personal finance call-in show that airs Sundays on XM Satellite Radio, Channel 169 "The Power," at 8 to 10 p.m.

? By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

? By e-mail:singletarym@washpost.com.

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