I pass on consulting work if I have any strong feelings that the customer and I are not a good fit. Many years ago, I had a potential new customer spend a lot of time telling me about the problems he had with developers, mostly that they wanted to walk from his projects. I ended up accepting work from him anyway because he was a nice guy and interesting to talk with. It took me a few months to finish promised tasks and extricate myself from his project, becoming another "walker."
I have had experience of clearly being at fault also: twice I have let myself be talked into projects in tech areas where my experience was really thin, and within a short period of time, had to notify the two customers that I was not a good fit to their needs. I was very apologetic both times and obviously did not bill them, but they were out the time documenting the tasks for me.
If you are a people-pleaser (and this doesn't necessarily carry a negative connotation), then it's a good tactic for any employer to play the victim card by talking crap about previous "walkers" in order to instill loyalty. You don't want to be a "walker", do you? ;)
Actually, I think you should pay extra precaution when dealing with "trashtalking victims", because I think the risk of dealing with a toxic customer is greater than losing a bit of revenue from someone who was genuinely burned.
I have had experience of clearly being at fault also: twice I have let myself be talked into projects in tech areas where my experience was really thin, and within a short period of time, had to notify the two customers that I was not a good fit to their needs. I was very apologetic both times and obviously did not bill them, but they were out the time documenting the tasks for me.