Sorry if this post is in the wrong category, but I didn't see a general PPC cat.

I have an e-com client who I use PPC to promote on providers like Overture, Google and business specific sites, like Bizrate. I track and compile a lot of data via query string from all PPC advertising.

I recently noticed that one term received a grossly dissproportionate amount of hits per purchase conversion rate on one specfic PPC provider. The ad term was being clicked on enough to make it the highest click rate term in the entire campaign on this particular PPC provider by a large margin; yet the product hardly sold.

While this isn't a large, corporate level ad campaign, we still spend a couple of grand a month on PPC. So, I don't believe this is just a freak anomally. I suspect that a competitor is repeatedly clicking this keyword, via script or manual slave wage labor, in order to drain my campaign's ad funds.

I am wondering:
1) Has anyone else seen this in their campaigns?
2) Has anyone heard or read of any preventitive measures Google, Overture, et al, have in place or plan to do to prevent this?
or
3) Am I just paranoid? :)
Regardless of whether or not you think I am paranoid, it seems to me that this could be a valid tactic to leverage out small/medium size players in the PPC world.