What Should I Check Before Buying Leads for My Business?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

Before you pay for leads, read the terms for seven things: who owns the customer and the data, whether the lead is sold to other businesses, how refunds for bad leads work, every fee, how the customer gave consent to be contacted, what the vendor does with the data, and how you cancel and get your records out. Write the answers down for each vendor. If a vendor won’t answer in writing, treat that as your answer.

Why it matters

Lead vendors write their contracts to protect themselves. Small business owners often sign up fast, start paying, and only later learn the leads were shared, the refund window was 48 hours, or the contract auto-renews for a year. A cleaning company that pays per lead and closes one in ten may be losing money on every lead and not know it until the contract is locked in.

20.3.1 Lead ownership

What it means: who owns the customer relationship and the customer’s information once the lead reaches you.

How to do it: ask the vendor in writing: “After a lead is sent to me, can I contact that customer again later without paying you?” and “Can you sell or send this customer to another business after me?” Get the answer in the contract or an email. Copy every lead into your own customer relationship management (CRM) system the day it arrives (see 15.3 Contact and Company Records).

Common mistake: keeping leads only inside the vendor’s app, then losing access to your whole customer history when you cancel.

20.3.2 Exclusivity

What it means: whether a lead goes only to you or to several businesses at the same time.

How to do it: ask how many businesses get each lead and whether exclusive leads cost more. Shared leads can still work, but only if you can respond within minutes (see 16.2.2 Lead Response Time). Write the number of businesses per lead in your vendor notes so you can compare cost fairly.

Common mistake: comparing a shared lead price to an exclusive lead price as if they were the same thing.

20.3.3 Refunds

What it means: the rules for getting credit back for leads that are wrong, fake, out of your area, or for a service you don’t offer.

How to do it: find out what counts as invalid, how long you have to dispute, how you submit a dispute, and whether credits come back as cash or account credit. Platforms differ a lot. For example, Google says its Local Services Ads review charged leads for 30 days and may credit some reported leads, but credits are not guaranteed (see 20.5 Local Services Ads). Set a weekly reminder to review and dispute bad leads before any window closes.

Common mistake: waiting until the end of the month to dispute leads, after a short dispute window has passed.

20.3.4 Fees

What it means: every way the vendor charges you, including lead fees, monthly subscriptions, setup fees, cancellation fees, and how payment is taken.

How to do it: list each fee in one place. Ask about minimum spend, auto-renewal, price changes, and whether the vendor charges your card automatically. Add all fees, not only the lead price, when you figure your real cost per job (see 20.10 Paid-Job Economics).

Common mistake: counting the $40 lead price and forgetting the $300 monthly membership that comes with it.

What it means: how the vendor gets the customer’s permission to be contacted, and whether that permission covers calls and texts from your business.

How to do it: ask to see the exact form and wording the customer agreed to. Ask whether your business is named in it. Federal rules under the Telephone Consumer Protection Act (TCPA) limit autodialed and prerecorded calls and texts without the right consent, and the rules for leads bought from third parties have been changing. Keep a copy of the consent record for every lead (see 12.6 Communication Consent Records). Ask an attorney before you call or text bought leads with automated tools. State rules can be stricter, so check your state attorney general’s site too.

Common mistake: assuming a lead is safe to text from an automated system because the vendor said “they opted in.”

20.3.6 Data use

What it means: what the vendor does with the customer’s information and with your business data, how long it keeps it, and whether it sells it.

How to do it: read the vendor’s privacy policy and data terms. Look for the words “sell,” “share,” “partners,” and “retain.” Ask whether your job outcomes or prices are shared with other businesses. Record what you find (see 11.2.7 Data-Processing Terms).

Common mistake: never reading the data terms, then finding your customers getting calls from a competitor the same vendor works with.

20.3.7 Exit

What it means: how you cancel and how you get your records back.

How to do it: write down the cancellation steps, notice period, and any fees before you sign. Ask whether you can export your leads, messages, and call recordings, and in what format. Ask what happens to your profile and reviews on the platform after you leave. Do a test export in the first month so you know it works.

Common mistake: finding out at cancellation time that exports aren’t offered and your reviews stay on a profile you no longer control.

When to get help from a pro

An attorney can review a lead contract before you sign, especially if it has a long term, a personal guarantee, or consent language you plan to rely on for calls and texts. Questions to ask:

Does this consent wording let my business call and text these leads, and with what tools?
What can I do if the vendor auto-renews or keeps charging after I cancel?
Who owns the customer data under this contract?

Bill’s note

[Bill: add a short note. For example, a lead vendor contract you or a client signed that turned out to have shared leads or a hard-to-cancel term, and what you check first now.] If you’d rather have this done for you, SiteSmarty can help you set up lead tracking before you sign with a vendor.

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: which lead vendors I reviewed and the answers I got to the seven questions]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the filled-in vendor checklist and the cancellation terms section of one contract]
[Result so far:]

Questions people ask

Are leads from lead generation sites shared? Often, yes. Many vendors send the same lead to several businesses. Ask how many before you sign.

Can I get refunds for bad leads? It depends on the vendor. Find out what counts as invalid and how long you have to dispute.

Who owns the customer after I get a lead? The contract decides. Get it in writing, and copy every lead into your own records.

Can I text leads I bought? Only with the right consent, and the rules are strict. Keep the consent record and ask an attorney before using automated texts.

Audit check

Outline line	Question	Pass looks like	Fail looks like	Evidence to collect
20.3.1 Lead ownership	Is it clear in writing who owns the customer and data?	Written answer, leads copied to CRM	Leads live only in vendor app	Contract clause or email, CRM records
20.3.2 Exclusivity	Do you know how many businesses get each lead?	Number recorded per vendor	Unknown	Vendor notes
20.3.3 Refunds	Are invalid lead rules and dispute windows known and followed?	Weekly dispute review	Missed windows	Dispute log
20.3.4 Fees	Are all fees listed and counted in cost per job?	Full fee list	Lead price only	Fee sheet and invoices
20.3.5 Consent	Is there a consent record for each lead?	Consent wording and record saved	“They opted in” with no proof	Consent copies
20.3.6 Data use	Were data use, retention, and sale terms reviewed?	Notes on terms	Never read	Privacy policy copy and notes
20.3.7 Exit	Are cancellation and export steps known and tested?	Test export done	No export option found too late	Exit notes and test export file

Where this fits

Do this first: 20.2 Choosing Paid Lead Sources

Do this next: 20.4 Paid Search Ads

Sources

Google Local Services Help, "How leads work" (checked October 17, 2026)
Federal Communications Commission, "Stop Unwanted Robocalls and Texts" (checked October 17, 2026)
Federal Trade Commission, "Protecting Personal Information: A Guide for Business" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.