I don't know how the module itself functions, not do I know how it verifies or checks anything specifically as I am not party to their coding methods.
The module is here:
www.automaticbacklinks.com/ - essentially it is a link exchange module. You add their module to your site and it shows 3 x links from other companies, your own site links are also then shown on other sites within the network and the system constantly monitors whether links are actually being displayed etc.
The problem I am having is that it doesn't seem to work very well with JoomSEF for some reason and the makers of this module said something about it not being able to read the SEF generated URL's. So basically, it does its checking, but says it can't find any links within the site.
Not sure if you've ever used this module before, but it seems to be becoming more popular within the Joomla community and if you are able to see how it functions and get it working correctly with JoomSEF it would be great.
Chris