The main warning signs are guaranteed number one rankings, prices hidden until a sales call, long lock-in contracts, vague monthly deliverables, reports that show rankings but never enquiries, accounts set up in the agency’s name, and hundreds of cheap links. Any one of these is a reason to ask harder questions.
No agency controls Google, so a ranking guarantee is either a promise about searches nobody makes or a sign the agency will take risks with your site. Cheap bulk links can earn a manual penalty that takes months to undo.
Watch for work you cannot see. If you cannot point to the pages written, the fixes made and the links earned each month, you have no way to judge the fee.
This is one part of a bigger picture. How to choose an SEO agency in Melbourne covers costs, contracts, what good SEO includes and how to spot a bad agency in one place.