Even if you are sticking to white hat SEO, you can receive toxic backlinks and get penalized for them, regardless of whether you were knowingly complicit.
What is a Toxic Backlink?
Backlinks are generally considered to be a positive factor in SEO. If a user finds your website's content informative, they might link to it from their own site. That backlink is a "vote of confidence" in your content.
However, toxic backlinks display signs of black hat tactics - low domain authority, mirrored pages, duplicate content, spammy websites, and low visible text to html ratio. You can find them manually or with a backlink analysis tool. ahrefs, SEMrush, or Moz subscriptions include a free backlink checker to help you work efficiently and spot toxic backlinks quickly. Depending on your site's needs, the link report in Google Search Console could be enough too.
Unlike some other SEO factors, Google is quite clear about their position and approach to toxic backlinks. Having too many toxic backlinks pointing to your website can weaken your website's SEO or even get you penalized from search engines.
Google Penguin, an algorithm that catches toxic backlinks, was released in 2012 and has subsequently matured over the past few years. If your site is hit with an algorithmic penalty by Penguin, you usually won't receive a notification, but you will start to see organic traffic decreasing.
The webspam team at Google also reviews link profiles manually. Manual review could be triggered for several reasons:
Spam report from a competitor
Algorithmic penalty triggered a manual review
Your business is in a competitive niche that Google actively monitors
If your site is hit with a manual penalty, you will usually receive a notification in Google Search Console.
How to Disavow Toxic Backlinks
In most cases, it's not necessary to use the disavow links tool. However, if your site is hit with a link-based penalty, you can recover by disavowing the toxic backlink. For manual penalties, you can submit a reconsideration request to Google.
For algorithmic penalties, Penguin now operates on a rolling basis, so you don't need to appeal or contact support after disavowing the links. If the link disavow is successful, Google will no longer consider it when determining your site's ranking in the SERPs. Most likely, you will see your site's organic traffic recover soon after cleaning up the link profile.
Finally, note that when you disavow links, it means that you are requesting Google to disregard the toxic links to your domain. Similar to rel=canonical, it's a suggestion rather than a directive. Although disavows are accepted in most cases, Google is not obligated to honor them.