I know we don't usually cover news that everyone else has, but I couldn't help spreading the word on this band of snakes. From David Wallace:
The company in question is Paramount Web Masters (www.paramountwebmasters.com). I'm am not going to link directly to them as I don't want to give them link credit. The story in short goes like this. A salesperson cold called one of Leann's clients essentially warning them that their site was going to be banned by Google because they were participating in a link farm. Nothing could be further from the truth as Leann’s company only builds sites of the utmost quality and does not participate in any types of schemes or tricks that would get a site banned by Google. This salesperson was obviously using a scare tactic to try to earn Leann's client's business.
When her client suggested that the salesperson contact their webmaster (IncreaseRanking), he/she refused stating that they were the culprits endangering their site. The client then comes to find out that it is Paramount Web Masters who can fix the problem. To make a long story short, the client passes on their service, obviously seeing through the salesperson's questionable sales techniques of which they then resort to blackmail stating that he/she will now try to get Leann's client banned from Google because they will not use their services.
Excuse me for a minute while I go throw up.
Sick, mean and evil. Compared to this company, most black hats are saints. Send out the warning to your fellow small businesspeople.
UPDATE: Aaron has an excellent post on the subject of this and other SEO scams and how they affect the industry as a whole (and some good comments about Google's ongoing "renting links is unethical" spiel).
There's a lot of it about. Not exactly the same issue, but I saw a Digg story recently which highlights that 'buyer beware' is at least as important in the online world as it is elsewhere: https://www.1cog.com/hostbreak.html
recently something similar happened to me. I took over ownership of a few domains and a few days later a local (very large) webdesign firm cold-called me (got my number off the whois info), asking if I wanted a site designed for one of my domains (it had been parked for several years). So, I told her that her company couldn't be all that great if they had to rely on cold-calling people to get business, and that I'd be spreading the word to void them (all i did though, was send out an email to my clients warning them about this crowd in case they got phoned by a salesperson)
If it were an SEO company, I'd simply ask "If you're so good as SEO, then why aren't you ranking for the term?" and hang up :p