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You would be hard pressed to find any competetive industry where links aren't being bought, sold, and traded.
Of course, these sites may be banned at some point, but maybe not. I would figure out a way to outdo them personally - not being one to stand by and get my a** kicked. :)
BTW, relevance of backlinks is meaningless in terms of Google, so long as they are using descriptive anchor text.
Identical links pages may be a problem though. If your gonna cheat, why not be smart about it, right?
For a fee the SEO creates a links page with about 150 or so links and then arrange for the reciprocal links.
If the SEO company is selling links on a page with 150 links, the clients are getting scammed. (Not much PageRank will get transferred to each site when the total is being divided by 150.)
He just said the pages are ranking #1, #2, and #3. PR is no longer nearly as important as anchor text anyway.
This seo company may be scam artists for all I know, but it isn't much different than the huge number of link pages in all the competetive areas right now. Many set up by link swapping systems and ranking quite well.
Either way, if the clients stay atop the SERPS, they will be happy. If their sites get penalized, the firm will be scam artists. Tricky business I guess. :)