Recognizing a scammer might be a little more difficult, but once you know it's a scammer, below is how I suggest handling it.  I suspected it when he sent the first ALL CAPS message.  He didn't confirm it for a long time, but I was having fun.  Then it got serious and he finally confirmed it:
dudipanuh : hey . your email and phone  please  
dscotese  : If you open up the  "TERMS OF TRADE    WITH DSCOTESE" link, it has my number: Text me  at (951)236-2719 or   message  me  on localmonero if you have  any questions.  
dudipanuh : okay . Your email  
dudipanuh : ??  
dudipanuh : hi?  
dscotese  : I probably won't get any email from you   because  of my filters. It's better to text me. If you text me  your   email address, then I can add it and email you if there  is a good   reason to do so.  
dudipanuh : okay . give  me  your email . i will send email and text
[He really wants my email address... I wonder why and am already suspicious.] 
dscotese  : 
dscotese@yahoo.com  
dudipanuh : ok  
dudipanuh : SENT YOU A TEXT PLEASE  PASTE  HERE  
dudipanuh : waiting for you
dscotese  : WHY SHOULD I DO THAT? AND WHY ARE  We  COMMUNICATING IN ALL CAPS NOW? IT'S HARDER TO READ!  
dudipanuh : sorry it was mistake  .all caps . i have  sent you text to verify please  paste  here  
dudipanuh : there  ? waiting...
[I received a verification code from Yahoo.  That only happens if Yahoo is trying to help me recover my email account. - He's trying to access my email account.] 
dscotese  : JUFBENJC is your Yahoo verification code  
[A fake code.]
dudipanuh : the  right one
[He must have tried the fake code to know that it was wrong.] 
dudipanuh : sent again  
dudipanuh : not needed now .bye  
dscotese  : What's wrong with the  first one?  
dscotese  : What are  we  verifying with Yahoo?  
dudipanuh : lol .you changed it .its not the  correct one  
dscotese  : I changed what?  
dudipanuh : code  
dscotese  : You got the  first one  working?  
dudipanuh : its expired now .if you can send me  correct one  i can request again  
dudipanuh : no, you sent me  wrong code  first one  
dscotese  : Okay, but you tried the  first one  I sent, right?  
dscotese  : I had to type  it by hand. Maybe  there  was a typo. Wasn't it close?  
dudipanuh : yes tried and it was wrong now its expired
[An admission that he is hacking my Yahoo email account.] 
dscotese  : What was the  correct one? I love  analyzing my own errors.  
dudipanuh : you have  in your phone  check it  
dscotese  : It was close  enough to what you sent me, right?  
dudipanuh : lol  
dudipanuh : it was completely changed and some  random numbers
[He's lying.  He has no idea what the code was.] 
dudipanuh : but its expired now .if you want i can send again new code  
dscotese  : What was the  old code  you sent?  
dscotese  : You're  using a Yahoo service  to verify phone  numbers?
[Now I'm misrepresenting myself to him.  By now I knew he was trying to get access to my email.] 
dudipanuh : you have  in your phone  check it  
dscotese  : It sounds useful, but I could just answer you if you text me  directly. It's way easier than relying on Yahoo.  
dudipanuh : can you paste  the  text if i send again  
dudipanuh : you provided me  wrong one  last time  
dudipanuh : sent again . if you will provide  i will verify and processed to trade  
dscotese  : I got the  same  one  twice. 
[True] Okay, my error was I put an N instead of an M. 
[False] It should be  JUFBENJC. 
[I intentionally used the N again, pretending to make the same mistake twice.]  
dudipanuh : its expired now  
dscotese  : Send it once  more  then.  
dscotese  : Why don't you just text me  directly?  
dscotese  : It's easier that way.  
dscotese  : It's still the  same  code.  
[True]
dscotese  : Did you use  an N instead of the  M?  
dudipanuh : it was expired  
dudipanuh : sent again  
dscotese  : Now I got a new one.  
dudipanuh : yes paste  here  
dudipanuh : or upload photo of it  
dscotese  : Its JKENXUDL  
dudipanuh : lol  
dudipanuh : again wrong one  
dscotese  : All good now?  
[Typed after he wrote lol.]
dudipanuh : its wrong one  you know it  
dudipanuh : its expired now  
dscotese  : It was the  M again. I keep hitting N when I should hit M.  
dudipanuh : no  
dudipanuh : i tried M but its wrong  
dscotese  : JKEMXUDL  
dudipanuh : its expired again  
dscotese  : You tried that?  
dudipanuh : its wrong one  
dudipanuh : yes tried  
dscotese  : Oh I'm so sorry. I'm a bit dyslexic. I swapped the  e  and the  K also. They kind of look the  same.  
[All Lies!  Ha ha, scammer.]
dudipanuh : right  
dscotese  : Ok, send it again and we'll see  if it's new.  
dudipanuh : its expired now .leave  it  
dudipanuh : i can't send now
[Yahoo finally blocked him., Yay!  I had also emailed abuse@yahoo.com to let them know A) I had access to my email account, and B) A scammer would use the first code I sent him (JUFBENJC) so Yahoo could identify him.  They have not replied but it's only been 20 hours and ten minutes.] 
dscotese  : I'm so sorry. Did I fuck up your Yahoo phone  number verifier account?  
dscotese  : It should warn you before  cutting you off.  
dscotese  : I would complain. So are  you just going to text me  directly to verify?  
dudipanuh : what  
dscotese  : You're  using a Yahoo service  to verify phone  numbers?
dudipanuh : yes why  
dudipanuh : yes why  
dudipanuh : yes why  
dudipanuh : and its fucked now  
dscotese  : Is that right? And now you can't verify   my number again because  it already failed too many times? I'm just   guessing about the  problem.  
dscotese  : Did they warn you?  
dudipanuh : you are  right and too smart  
dscotese  : How do I make  it up to you?  
dscotese  : There  is no such thing as "too smart".  
dudipanuh : why you are  here  ?  
dscotese  : Just text me, okay? Then you'll know it's really my number.  
dudipanuh : you provided me  wrong email  
dscotese  : No I didn't. 
dscotese@yahoo.com. I never mistype  that one. It's muscle  memory.  
dscotese  : Did you send me  an email?  
dudipanuh : what about 
dscotese@litmocracy.com  
dudipanuh : and 
dscotese@gmail.com
[Thanks for showing me that you're capable of researching me.  I am proud to be known.]   
dscotese  : That one  works too, but it just forwards.  
dudipanuh : you are  SMART  
dscotese  : Thanks. I can teach you.  
dscotese  : But you might not be  humble  enough.  
dudipanuh : no i'm already a teacher  
dscotese  : You can sign up for my mailing list at   
http://eepurl.com/Pp7jf - I'm using it to keep my customers informed and   also encourage  others to deal bitcoin. It also explains more  about   how to avoid scammers. The  newsletter archive  is available  at   
http://goo.gl/ZNjWe9    
dscotese  : So why are  you using Yahoo's service  to do something you can do yourself?  
dscotese  : Are  you going to mail me  $4,885?  
dudipanuh : Pro trader  
dudipanuh : yes  
dscotese  : Pro Trader?  
dudipanuh : you are  a fucking pro trader at LBTC  
dudipanuh : Using 2FA at all sites  
dudipanuh : including gmail  
dscotese  : Yes, but I dont fuck as much as I'd like  to :-(  
dudipanuh : but why you are  behaving like  kid ?  
dudipanuh : acting like  newbie  
dscotese  : Some  sites don't let you see  that a user is using 2FA unless you have  their password.  
dscotese  : I'm not acting like  a newbie. What do you mean?  
dudipanuh : like  LBTC  
dscotese  : You're  smarter than you think.
[Google Gabor Mate.  People who have "Adverse Childhood Experiences" (also something to Google) tend to have low-self esteem and are at risk to become criminals, get diseases, and commit suicide.  Pooh Bear's advice to Christopher Robin (A.A. Milne's son) was meant to help heal those wounds, and I love to pass it on.] 
dudipanuh : sometimes 2FA get compromised  
dudipanuh : like  happens on LBTC few months back  
dscotese  : You should consider using a white  hat   instead of a black one. You could feel good about yourself instead of   bad. You could help people.  
dudipanuh : not having money to eat you can't help  
dscotese  : Have  your efforts to teach ever given you the  opportunity to be  humble?  
dudipanuh : you are  a good person .Sorry what i tried to do with you  
dscotese  : It's okay. You gave  me  the  opportunity to help someone. Maybe  I will be  able  to.  
dudipanuh : This World is cruel man .  
dscotese  : I know, but a large  part of that is just karma.  
dscotese  : Sometimes you make  an honest trade  with someone, right?  
dudipanuh : true  .this is a phishing site  which i made  
dudipanuh : 
http://localbticoins.tk/localbitcoins.com/accounts/login/index.html  
dscotese  : A few times, they paid you too much and you kept quiet about it.  
dudipanuh : Cancelled the  trade  
dscotese  : You thought it was great and ignored their suffering. That is the  problem. It always comes back somehow.  
dudipanuh : i'm a Human and i'm having heart  
dscotese  : You currently do not have  enough money   to compensate  all your victims, but you're  smart enough to earn it.   It will take  a long time  but that kind of work will heal the  parts of   you that are  broken.
 
[I think I went too far.  His redemption would have to be a lot more gentle for him to be interested in it.  At least I gave him some seeds that might grow.] 
dudipanuh : i don't have  to eat  
dudipanuh : Good luck for your trades  
dudipanuh : Nice  to meet you  
dscotese  : You write  English well enough to tell   the  story and inspire  others. Beg openly, and offer your knowledge  of   security. Let people  know that you used to be  a scammer and you   wanted to redeem yourself. Tell them all the  ways they are  endangering   themselves.  
dscotese  : I tend to open a lot of doors for   people  who never walk through them. I won't stop opening them though. I   wish you luck too, and hope  that you can improve  your karma.  
dudipanuh : you are  right .But in this world people  only help for their own profit or you have  enough power to snatch from them .  
dudipanuh : if i openly beg from you .what will your reaction ?  
dudipanuh : and yes its karma  
dscotese  : You would say "there  ? waiting..." and   then when they paste  the  code  you would say: "You just let me  into   your email account. I'm good at hacking, and instead of stealing, I'm   trying to help. Please  be  more  careful in the  future, and if you   appreciate  my help on this matter, can you send me  $5 of bitcoin or   something?"  
dscotese  : If you can hack me, I will send you $100 of bitcoin as long as you explain how you did it.  
dudipanuh : true  
dudipanuh : appertained  
dudipanuh : Right  
dscotese  : Ok. Good chatting with you. I hope  you run into enough smart people  and find your way to earning honest money.