How do you choose a lead generation company?

A good lead generation company can tell you exactly where its leads come from, who else gets them, what the customer agreed to, what you can get credited, and how to leave. A bad one gets vague on all five. This guide is a checklist you can use with any vendor: a marketplace, a pay-per-call network, an agency, or a local lead seller.

It does not matter how polished the sales call is. What matters is whether the answers hold up in writing and whether a short test produces jobs at a cost you can afford.

Ask every vendor these, and ask for the answers in writing.

Lead source

1. Where exactly do your leads come from? Your own websites, paid search, social ads, other publishers, call centers?
2. Do you buy leads from other companies and resell them?
3. Can I see an example of the ad or page the customer saw?

Exclusivity 4. How many other businesses receive the same lead? Is that true across all your channels or only in my zip code? 5. For how long is a lead exclusive?

Consent and compliance 6. What consent language does the customer agree to? Does it name my business? 7. Can I get a consent record for each lead (timestamp, page URL, consent text)? 8. How do you handle a customer who says “stop”?

Credits and refunds 9. Which leads can be credited, by when, and how? 10. Are credits cash back or platform balance? Do they expire?

Contract terms 11. What is the minimum term and the minimum spend? 12. Does it auto-renew? How do I cancel, and what happens to prepaid funds?

Data and assets 13. Who owns the website, domain, phone numbers, call recordings and ad accounts? 14. Will I get raw data (every lead, every call) or only a summary report?

Results 15. What cost per booked job do you expect for my trade and market, and how will it be measured?

Because quality, exclusivity and consent all flow from it.

The FTC’s case against HomeAdvisor shows why. In 2023 the FTC announced an order requiring HomeAdvisor to pay up to $7.2 million¹. The FTC’s complaint alleged that HomeAdvisor told service providers they would only receive leads matching their services and preferred area, when many did not, and that it claimed its leads turned into jobs at rates much higher than it could substantiate¹. The order bars false claims that leads came from consumers who are ready to hire or who submitted a request directly to HomeAdvisor¹. These were allegations settled by order, but the lesson for buyers is plain: ask for proof of source and conversion claims.

FTC staff have also described how lead generation works behind the scenes. Their report says consumers may not realize their information can be sold and re-sold multiple times, and that it may go to the companies willing to pay the most rather than those best suited to serve them². A lead that has passed through three companies is not the same as a customer who filled out a form on a site built for your service.

A vendor that discloses its sources is easier to trust. For example, eLocal’s FAQ says its calls come from its own family of brands, partners and major search engines¹². That is not a full audit, but it is a starting answer you can test.

If you call or text leads, consent is your problem too, not just the seller’s.

Federal rules bar telemarketing calls using an autodialer or an artificial or prerecorded voice to cell phones without the called party’s “prior express written consent”³. That consent must be a signed written agreement (electronic signatures count) that clearly authorizes the seller to deliver those calls to a specific number, with a disclosure that agreeing is not a condition of purchase³. The rules define the “seller” as the business on whose behalf the call is made³, which is why buyers of leads cannot assume the risk stays with the vendor.

The stakes are real. The Telephone Consumer Protection Act lets a person sue for $500 per violation, and a court can raise that to three times the amount for willful or knowing violations⁴. Consumers can also revoke consent by any reasonable means, such as replying “stop,” and revocations must be honored within 10 business days³. The FCC adopted further opt-out changes in September 2026 that take effect after Federal Register publication, so check the current rules in the TCPA and consent guide.

One point that many sales decks get wrong: the FCC’s one-to-one consent rule, which would have required consent to name one seller at a time, was vacated by the Eleventh Circuit in January 2025 in Insurance Marketing Coalition v. FCC⁵. It is not current federal law. Consent that clearly names your business is still the safer practice, because it is easier to defend.

Ask for proof per lead. Consent certificate services, such as ActiveProspect’s TrustedForm, record a time stamp, session replay, page URL and the consent language shown⁶. If a vendor cannot produce any record of what the customer agreed to, treat that as a serious gap. State laws can add stricter rules. This is not legal advice; talk to a TCPA attorney about your setup. See TCPA and lead consent.

Every major platform credits some bad leads and refuses others. Read the policy before you pay.

• Thumbtack takes refund requests within 45 days, decides case by case, and does not refund when the customer hires a different pro¹⁰. Prepaid credit packages are not refundable, and all sales are final if you close your account¹⁰.
• Angi credits invalid contact info, wrong location, service mismatch, duplicates and charges while paused, if you request within 45 days and tried to call within 24 hours¹¹. It does not credit leads that hired another pro or are collecting quotes, does not offer credits to annual subscription holders, and credits expire after six months¹¹.

A fair policy, from any vendor, should state in writing: what qualifies, the deadline, the evidence needed, how fast you get an answer, and whether you get cash or platform balance.

• Minimum term. A 12-month commitment before a test is the single most expensive mistake on this page.
• Minimum spend and prepaid balances. Know whether unused funds come back.
• Auto-renewal. Put the renewal date on your calendar the day you sign.
• Credit restrictions tied to contract type. Angi’s annual subscriptions, for example, do not get lead credits¹¹.
• Exit terms. Some vendors run with no contract at all; eLocal, for example, says it has no contracts and you can cancel at any time¹². That is the standard to compare against.

You should own anything that keeps producing value after the vendor is gone: your domain, website, Google Business Profile, ad accounts, tracking phone numbers and customer list.

Google sets minimum rules for agencies that manage Google Ads. Its third-party policy requires them, where Google’s terms call for a monthly performance report, to include costs, clicks and impressions at the account level; to report the exact amount Google charged, separately from their fees, whenever they share cost data; to give you your Google Ads customer ID on request; and to disclose any management fee in writing before your first purchase and on every invoice⁷. For SEO, Google advises granting only read access to Search Console when someone offers an audit⁸.

If a vendor builds your leads on its own websites and phone numbers, you are renting. That can be fine, as long as the price reflects it and you know you leave with nothing.

Two vendors pitch a roofing company. Prices, rates and contract terms below are illustrative.

Vendor A: $55 per shared lead, 12-month contract, $2,200 monthly minimum, credits only for bad contact info. Vendor B: $140 per exclusive lead, month to month, credits for wrong area, wrong service and bad contact info.

Month-one test with each (illustrative rates):

Now add contract risk. If both tests disappoint and you want to stop after month three:

• Vendor A: 9 months left x $2,200 minimum = $19,800 still owed.
• Vendor B: $0. You stop.

The cheaper lead was the more expensive vendor on both counts: cost per job and exit cost. Your numbers may favor shared leads if you respond in minutes. See exclusive vs shared leads for that math. The contract math does not change.

1. Agree in writing on what counts as a lead, a credit and a booked job.
2. Use a tracking number or source field so every lead is tagged. See lead tracking and attribution.
3. Respond to every lead fast and the same way, so the vendor is judged on leads, not your follow-up.
4. File credits weekly, inside the deadline.
5. At the end, compare cost per booked job and gross profit per job against your other channels.

• Ask where leads come from, who else gets them and what consent the customer gave, and get it in writing.
• Consent rules can follow the lead to you; ask for a record per lead and talk to a TCPA attorney about your calling and texting.
• Read the credit policy and contract before paying: deadlines, cash vs balance, minimums, auto-renewal and exit terms.
• Own your domain, profile, ad accounts and numbers, and get raw lead data, not just summaries.
• Run a short test and judge it on cost per booked job, then commit.