Like any new industry, scammers will start up because they know that potential customers don't understand the industry. It's easy to be a snake oil salesman.
I've been doing my own SEO for 10 years now and have hired around 10 companies from time to time to help out. So I have had the experience to spot the bad guys when they screw up as I'm also an SEO.
I've seen businesses blow mountains of cash on SEO companies that are either scammers or don't even realise that they're doing a horrible job.
Ben, It gets worse. Sometimes an SEO company is SO BAD that they'll make decisions that actually do more harm than good.
Here are some common examples that I've personally experience
  • They created 100's of forum profiles and include our link in the profile. We had to have them remove them immediately. They tried their best to convince us it was safe. If I didn't know any better, I would have believed him as they were very convincing. If google found this, we could have been close to being penalised
  • We gave them access to a website so they could make improvements. Turns out that they used this opportunity to link to themselves from our footer. This is unacceptable and will do more harm than good.
  • 1000's of low quality links with exact match keyword text. More harm than good.
Luckily, I never allowed these companies to work on my main website http://www.vroomvroomvroom.com.au and we still rank highly for most car rental terms.
Others aren't so lucky and have had their businesses nearly destroyed.
THE PROBLEM
The good SEO companies deserve to be paid more the horrible companies deserve to be named and shamed so that others don't make the same mistake.
THE SOLUTION
I'm working on a project to rank the worlds best and worst SEO companies. Stay tuned!