Here is an article that speaks more about this problem.
http://www.webproworld.com/viewtopic.php?t=22173 (is it ok to post links to other forums? )
The article states that people are recruited into networks to click on competitor ads. The article even quotes a Google rep about the need to hand out refunds.
Awall19, can you list some of the services or products that let you manage your ppc campaign while protecting your self from fraud?
The article recommends one product.
I just don't think you can naively enter into this form of advertising.