In theory, the world would be a great place to work if everyone were honest, transparent, and competent. We would not have to waste time out of our busy workdays uncovering and dealing with mistakes, frauds, intrigues, scandals, shenanigans, and so forth. We could focus on what we’re really in business to do, which is satisfying customers’ demands efficiently and effectively.

In reality, we all know the world is different from this. Regrettably, life is not so straightforward. Work and business are complicated by the ever-present necessity to maintain situational awareness and never let our guard down. Without being paranoid or cynical, we understand reality — everyone in the business world is looking out for their own best interests, regardless of how positively or negatively this might affect you or your business.

In the spirit of managing risk, here are five tips for avoiding getting ripped off:

1. Demonstrate due diligence. Sometimes prevention is the best cure. Effectively position yourself to give others the impression that you are watching over your interests with an eagle eye. In a situation of risk and uncertainty, demonstrate that you will do whatever it takes to dot all the i’s and cross all the t’s to ensure that you are not taken for a ride. At the same time, be careful to maintain the element of surprise and not divulge key facets of your due diligence strategy.
2. Ask open-ended questions in a non-threatening manner. Take the lead on getting to the bottom of whatever matter you are handling. Know when to be laid-back and casual and when to lower the hammer. In certain situations, if you ask pointed questions or insinuate suspicions of wrongdoing up-front, you will often encounter stonewalling and defensiveness. It is better to give the other person an opportunity to voluntarily come clean if they have the impression that you are bargaining in good faith. If information is not forthcoming after a brief time period with the casual approach, more drastic steps can be pursued.
3. Anticipate responses. Know the boundaries of what would constitute a legitimate explanation versus what you should consider an excuse, illegitimate rationalization, non sequitur, or plain old lie. Have follow up questions planned depending on what responses you receive. Also, anticipate that others you are dealing with will try to use the element of surprise to their own advantage. Expect the unexpected.
4. Make sure you understand. Be alert for a “shark in the water” when you hear someone throw out expressions that are clearly intended to artfully baffle others. Some people are easy to manipulate, so don’t let yourself be one with the wool pulled over your eyes. Don’t take everything you hear at face value. Dig deeper, and don’t ignore red flags.
5. Buy time. Issues arise over time. If you are dealing with a legitimate operator you will notice a pattern of competence, professionalism, and integrity. Take time to observe who you are dealing with, and realize that they are generally putting their best foot forward for you from the get-go. Always expect potential negative surprises, rarely positive ones, to surface later. If you have a negative taste in your mouth from the get-go in your dealings with someone, don’t expect it to get any better with time. Also realize there is a fine line between buying time and procrastinating. Depending on the scenario, if you wait around too long, issues can start to pile up and it can become increasingly difficult to navigate through the compounding complexity. Take enough time to work through due diligence and gain confidence, but once you’re ready to progress with a business deal or relationship, move forward.

Finally, it is important to recognize that we all will make mistakes in our dealings with others. Someone might try to rip you off and have some success, but don’t worry about it too much. Rather than getting discouraged or frustrated, learn from your mistakes and be wiser the next time you encounter similar situations.