I've had some major issues with clickfraud on Adwords and you just have to take it as a cost of doing business.
You can send them logs of the traffic that you think is fake, they'll review it and refund you for those clicks if they agree that it's click fraud. However most click fraud is generally short lived; you can either wait it out until the person gets tired of trying to run up your click costs, or pause that campaign and move to another niche for a while.
I've read claims of 10-20% of clicks being fraudulent and I would agree with that for the most part. Sometimes you can step on someone's toes in a small niche it can be even more.
Google claims to be getting on top of the click fraud problem but they're also not that motivated to, because in most cases they are getting paid for the clicks. They care about surfers - they don't really give a shit about advertisers.
You just gotta keep an eagle eye on your conversions - fraud or not, it just boils down to money in vs money out.