I just went through that this week. A woman selling a "Start your own business" book on eBay bought my book and signed up for access to my site. I only discovered this morning what had happened. There`s a long story in there with a little past history, but I believe that some of her material is ripped off from some of my older stuff.
Long story short, when I discovered what happened, I cut off her subscription to my group, refunded the money for the access (but not the book since she got that already) and told her POLITELY I was "on to her". I also reminded her that she signed a legally binding agreement not to repackage, re-sell or use the information from my book. Thankfully, she never logged into my site. It`s 1000 times more content rich than my book.
This has now happened to me 3-4 times where my competition either joins or I have current members decide to compete against me. No one has succeeded for a variety of reasons.
Despite being angry about it, I always handle the situations with the most polite attitude and utmost fairness. I figure it`s better to NOT give them anything they can point to and say bad things about me. For instance, I refunded $30 back to the woman today despite the agreement requiring her to purchase 3 months minimum of access in order to get a discount on my book.
So, how do YOU handle these situations? Do you fly off the handle and say everything you`re thinking that might be saved and used against you in the future? Or, do you take the high road (because in most of these situations, the other side takes the low road and calls me names) and not give them anything to use against you?