"Legit" is doing too much work in that question, and the ambiguity is what costs owners money. A lead company can be a properly registered business with an office and a payroll, and still sell you leads that were harvested from a blog calculator. A vendor can send real leads from real homeowners and still be the reason you get named in a lawsuit over calls you never made.
So split it into three tests. Does the company exist in the public record. Do the leads exist. Does the consent exist. Each one is free to check, each takes minutes, and each fails differently.
Why the vendor's paperwork is your legal problem
Start here, because it reframes everything else. Most guidance on vetting lead companies treats the risk as financial: you waste a marketing budget. The larger risk is that you inherit the vendor's conduct.
In Braver v. NorthStar Alarm Systems, LLC, No. CIV-17-0383, decided in the Western District of Oklahoma on 15 July 2019, an alarm company bought leads from a generator called Yodel between February and October 2016. Yodel produced those leads by cold calling lists of phone numbers using a soundboard system. That the calls were made without consent was not in dispute. What was in dispute was whether the company that merely bought the leads could be held responsible, and the court found it could, on three separate agency theories at once: classical agency, apparent authority and ratification. The facts that got NorthStar there were mundane. It had reviewed call scripts. It knew soundboard technology was in use. It coordinated on how leads were delivered and shared information systems with the seller.
Roughly 252,765 calls over a nine-month window were at issue, which the trade press put at $126 million to $379 million in potential statutory exposure for the buyer.
Watch out
The lead seller in that case generated the leads. The lead buyer paid for them. The buyer is the one carrying nine figures of exposure. When you ask whether a lead company is legit, you are asking whether you are comfortable being its co-defendant.
The regulatory floor under this got lower, not higher. The FCC's one-to-one consent rule, which would have required a consumer to consent to each seller individually rather than to a page full of "marketing partners," was vacated by the Eleventh Circuit on 24 January 2025 and formally repealed by the FCC in July 2025. Whatever protection you assumed was coming is not coming.
North of the border the burden runs the other way and the numbers are larger. Canada's anti-spam legislation puts the onus of proving consent squarely on the sender, and carries administrative monetary penalties of up to $1 million per violation for an individual and $10 million for a corporation. The largest CRTC notice of violation to date was $1.1 million, later set at $200,000 in the resulting enforcement decision. If you are a contractor in Ontario buying leads generated by a vendor's email or SMS campaign, "the vendor sent it" is not the defence you want to be building.
Check 1: Read the filings before you read the pitch deck
The best-documented vetting story in the trades did not involve a private investigator. A contractor posting in r/Contractor was pitched a "high demand" lead package with a 30 percent discount and a twelve-month lock-in. Instead of calling references, he pulled the vendor's earnings call transcript and found leadership describing declining lead volume in the same channel the salesperson was calling a gold rush. The post drew 89 upvotes and 99 comments, most of them from operators who had signed.
You can do this in about four minutes for any publicly traded vendor, and the numbers are more current than any blog post. Angi's Q1 2026 results, reported 5 May 2026, disclose the following.
| Metric, Angi Q1 2026 | Value | Year-over-year |
|---|---|---|
| Revenue | $238.2 million | down 3% |
| U.S. Network Service Requests | 267,000 | down 55% |
| U.S. Network Leads | 374,000 | down 54% |
| Proprietary Service Requests | 3,254,000 | up 17% |
| Proprietary Leads | 4,048,000 | up 13% |
| Average Monthly Active Pros | 105,000 | down 22%, from 134,000 |
Two things fall out of that table that no sales call will tell you. The network channel, which is the resold third-party traffic most contractors are sold, has collapsed by more than half, a continuation of the 33 percent and 57 percent declines the company reported for Q1 2025. And a fifth of the pros are gone in a year. When a salesperson tells you demand in your area is surging, that is a claim you can check against a document the company filed under penalty of law.
For a private vendor, the equivalent is the corporate registry. In the United States, search the Secretary of State business database for the state named on the contract. In Canada, search Corporations Canada for federal entities and the provincial registry, such as the Ontario Business Registry, for provincial ones. Three fields matter:
- Does the entity on the contract exist under that exact name. Not the brand on the website, the legal entity on the invoice and the terms of service. Those differ more often than they should.
- Is it in good standing, or dissolved, struck, or delinquent on filings.
- How old is it. A company incorporated four months ago asking you to sign a twelve-month term is asking you to outlast it.
Then check the domain age with any WHOIS lookup. A six-week-old domain paired with case studies going back three years is a settled question.
Check 2: Run the regulator and the court search
Two free searches, five minutes, and they are the ones almost nobody runs.
Search the FTC's cases and proceedings database, and your state attorney general's press releases, for the company name and its parent. This is not a theoretical exercise. In March 2022 the FTC charged HomeAdvisor, an Angi affiliate, with making false claims since at least mid-2014, specifically that service providers would only receive leads matching the services they provide and their preferred geographic area, and that its leads converted into jobs at rates it could not substantiate. The January 2023 order required payments of up to $7.2 million. Samuel Levine, then Director of the Bureau of Consumer Protection, said the order "requires HomeAdvisor to refund home service providers millions of dollars and stop misleading them about the quality of its leads."
Then search court records. Federal dockets in the United States are on PACER, Canadian decisions are on CanLII, and a plain web search for the company name plus "class action" or "v." finds most of what matters. HomeAdvisor has been the defendant in contractor class actions including Airquip Inc. v. HomeAdvisor Inc., No. 1:16-cv-1849. A vendor with three contractor suits filed against it is telling you what year two looks like.
By the numbers
Here is the part that should change how you sequence your diligence. In the HomeAdvisor matter, the FTC's order provided payments of up to $30 per service provider for the lead-quality misrepresentations, plus up to $59.99 for a subscription sold as free. The agency returned more than $3 million to affected businesses in November 2023. The maximum recovery for years of misrepresented leads was $30.
Being right after the fact is not a remedy. The check has to happen before the first invoice. If you are already inside a bad agreement, the mechanics of getting credited are a separate problem, and we covered the platform-by-platform deadlines in how to dispute a bad lead credit.
Check 3: Trace one lead back to its consent record
This is the question a reseller cannot answer, and it takes one sentence: "Send me the consent certificate for one real lead."
A vendor running its own funnel captures a timestamped record of where the person submitted their details, what disclosure text they saw, and when. TrustedForm and Jornaya both produce these, and they are standard equipment in any compliant lead operation. A vendor that owns its traffic will have one for every lead and will not blink at the request.
A vendor that is buying leads from a network and marking them up will do one of three things: promise to "get that from the team," send you a screenshot of a form rather than a certificate, or explain that certificates are not needed in home services. None of those is a yes.
Why this matters more than the exclusivity question everyone asks first: exclusivity determines your close rate, consent determines your liability. A contractor in r/Roofing described calling an Angi lead within 90 seconds on a recorded line and reaching a college student who had filled in a roof cost calculator on a blog for a school project. He owned nothing and could not have bought the service. The recording was submitted and the platform's response, per his account, was that he needed a better salesperson. The matter ended in court, where he recovered the charges and lost more than that in legal fees.
That lead was not fake in the sense of being invented. A real person really typed their number. They just never consented to be called by a roofer, and the person who called them was the contractor, not the platform.
If the diligence keeps ending with "this vendor owns the traffic and I rent the results," that is the actual problem, not the vendor. We build the conversion page, the qualifying form and the ad campaigns in your name and your accounts, so the pipeline is an asset you keep.
Check 4: Look for the vendor in your own map pack
Some lead companies do not just sell you customers. They compete with you for them, using listings that look like local contractors.
An operator in r/GoogleMyBusiness documented a Fort Wayne concrete outfit running its main Google Business Profile alongside two lead-generation profiles, with the main listing and a lead-gen listing holding positions one and three in the map pack at the same time. One of the fake listings carried a one-star rating and still ranked, because the profile name was the exact search phrase, "Stamped Concrete Fort Wayne." A commenter on the same thread put the scale of it bluntly: "How do you think every legitimate contractor gets 10+ spam calls a day from companies who sell leads. This is what they do."
The check is quick. Search your top three money keywords plus your city and look at the map pack. Then look up each listing's address. If a listing at a UPS Store or a residential lot is outranking you, and the phone number forwards, you have found a rank-and-rent operation. If the vendor pitching you owns one of those listings, you now know exactly what you would be buying: your own market, resold to you.
Check 5: Read the refund clause and the term as one document
Vendors are careful to keep these in separate places, and they only make sense together.
Read the refund policy for its exclusions, not its promises. Nearly every platform says it credits bad leads. What matters is the list of situations that do not qualify, and that list usually contains the two ways you actually lose money: the customer who does not respond, and the job you quoted but did not win. Note the window as well, and note it from the signed terms rather than the help centre, because when the two disagree the terms are the binding document.
Then read the term and the notice period together. A twelve-month agreement with a 90-day cancellation notice is a fifteen-month agreement. Contractors describe exactly this trap on Angi, including a tile contractor who paid $285 for an annual subscription and then $100 to $130 per lead, hitting $235 in additional charges in a single week, with refunds refused. If you are weighing a long agreement, we walked through the specific clauses in should I sign a 12-month lead contract.
For a first engagement the healthy answer is month to month, or a defined 60 to 90 day pilot with a stated exit.
Check 6: Buy 20 leads before you sign anything
Every reference the vendor gives you was chosen by the vendor. Twenty leads over one week were not.
Buy the smallest volume they will sell, then measure four things and nothing else:
- Connect rate. How many phone numbers reach a live person on the first three attempts.
- Recall rate. How many of those people remember submitting a request. This is where harvested and recycled leads die.
- Fit rate. How many are inside your service area and your actual job type, which is precisely what the FTC alleged HomeAdvisor misrepresented.
- Exclusivity, measured rather than promised. Ask every single person how many other companies have already called. If the answer is routinely three or four, the lead was shared regardless of what the contract says. Published policies vary widely and are worth reading: CraftJack states it will not distribute a lead to more than four contractors, and Porch's own lead buyer agreement describes generally selling non-exclusive leads to up to four buyers while reserving warm transfers and direct phone leads for one.
The red flags, ranked by how much they cost you
| What you hear or find | What it usually means | Cost if you ignore it |
|---|---|---|
| No consent certificate available | The vendor resells network traffic | You are the defendant, not the vendor |
| Entity registered months ago, long-term contract | Nothing to sue and nobody to invoice | Full prepayment, no recourse |
| "We run it in our ad account, it is easier" | You are renting, not building | Everything goes dark on day one after cancellation |
| Guaranteed lead count, no written definition | The number will be hit somehow | Volume of unqualified leads, billed |
| Cold text or cold call started the relationship | Your details came off a public registry | The same list is being sold to your competitors |
| Vendor's own listings rank in your map pack | Rank and rent | You are buying your own market back |
| Refund policy excludes no-answer and lost bids | The two real failure modes are not covered | Every bad lead is billable |
Legit and still ruinous: run the arithmetic separately
A vendor can clear all six checks and still be the worst money you spend this year, because legitimacy and unit economics are unrelated findings.
The arithmetic that decides it is cost per acquired job, not cost per lead. A lead at $50 that closes at 5 percent costs $1,000 per signed job and consumes twenty conversations. A lead at $150 that closes at 25 percent costs $600 per signed job and consumes four. The cheaper lead is the more expensive one, and the difference is exclusivity and speed.
There is a version of the same trade that goes the other way, and it is worth knowing about. A roofer in r/Roofing described a prepaid Networx arrangement that has lasted more than five years, at roughly one legitimate lead a month, with about 85 percent of leads genuine and a straightforward refund process. Low volume, high quality, no drama. That is a perfectly rational purchase for a small shop, and it looks nothing like the pitch a rep will bring you.
Tip
Before any test spend, write down the number you will not exceed per acquired job. Take your average job's gross profit, decide what share of it you are willing to give to acquisition, and that is your ceiling. Every vendor conversation gets measured against that one number instead of against the price per lead.
A contractor in r/Contractor put the other end of the market as plainly as anyone: the vendors buy your details off public business registrations and blast you, the leads go to five to ten contractors, and "even the 'legit' ones have terrible close rates because there's zero exclusivity."
The 20-minute checklist
Run it in this order. It fails fast, which is the point.
- Two minutes. Corporate registry search on the exact legal entity from the contract. Existence, standing, age.
- Two minutes. WHOIS the domain. Compare its age to the case studies.
- Four minutes. FTC cases database, state attorney general, plus a search for the company name with "class action." For a public vendor, open the latest quarterly results instead and read the channel that would serve you.
- Three minutes. Search your top three keywords plus your city. Look for the vendor, or listings like it, in your own map pack.
- Five minutes. Ask for one consent certificate for one real lead, and the written definition of a qualified lead. Wait for both in writing.
- Four minutes. Read the refund exclusions and the notice period as one document, from the signed terms rather than the help centre.
Then, and only then, buy twenty leads and measure four rates.
The whole reason this checklist exists is that most contractors are buying access to someone else's audience. Tell us your trade and your service area and we will map what an owned pipeline looks like for you: your page, your form, your ad accounts, and the tracking that ties a lead to a signed job.
None of these six checks requires a lawyer, a subscription or a favour. What they require is doing them before the pitch call rather than during month three, when the money is gone and the rep has stopped answering. A vendor running a real system passes all six without friction and usually volunteers half of it. A reseller fails on the consent certificate first, which is why that is the question worth asking early. And if the honest conclusion is that the only pipeline you fully control is the one you build in your own name, that is not a disappointing finding. It is the finding.