ClickZ covers a cautionary tale - with a somewhat happy ending - of a small insurance business that was able to detect and stop what was probably a local competitor perpetrating click fraud on his Google and Overture keyword campaigns. Through the use of the WhosClickingWho.com tracking service, Scott Hendison was able to discover that one person was turning to be the source of a huge proportion of the clicks he received each month on his OregonHealthInsurance.net site, and that this person lived in the same city. The tracking service allowed him to send that individual a pop-up (with the words "Stop, you weasel! I know who you are and have reported you to the proper authorities.")
The clicks stopped. And Hendison did report the incident to both Google and Overture.
Overture refunded almost all of the money he had paid against the allegedly fraudulent clicks, which had cost OregonHealthInsurance.net several hundred dollars a month. Google refunded only about half the amount.