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This refers to malicious clicks on paid search adverts which are not from genuine customers. This can be competitors trying to spend their competitions budget.

Google itself does keep an eye on this and if it detects it your account will be credited to compensate.

You might be interested in the following related posts:

1. Do You Suspect Click Fraud? Here’s a Simple Solution…
2. Click Fraud Figures Continue to Improve
3. Pay Per Click Fraud Remains Constant at 16 Percent
4. What Can Pay per Click do for Your Business?
5. Search Engine Optimisation Marketing Budgets Way Behind Pay Per Click