There is a tremendous amount of spam in Local Services Ads (LSA), especially in California. In some cities, I am seeing 100% spam in the "Google Screened" results section.
I have brought this to Google's attention and they claim they're working on a "scalable solution". The only problem with this is that they've been telling me this since February 2022.
Currently, manually reporting spam does not work. They will not take action on individual spam reports.
As for Virtual Office addresses, they won't answer me. On the
LSA FAQ page, Google states
“While you can have more than one Google Local Services Ads account and location, each location needs to have its own address and be verified by our team.” However, Google does NOT verify addresses. I've tested this, and law firms are able to use any address that they please.
I would personally classify the fake addresses as spam, however, at the moment Google does not take action on these listings.