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8 pages. Seriously, 8 pages? Over 3+ days? Wow.
As a business owner myself I'm all about solving complaints and getting things turned around fast and with a positive spin rather than fire wall after wall of text at a problem that the masses don't agree with.
In other words wouldn't it have been better to just pay Johnny Shoehorn his 300 bucks or whatever and then let him decide if he wants to take advantage of the $100 PPS deal or discontinue doing business with you, and be done with it? Problem solved, no need for a trainwreck thread, no need to burn your valueable time posting damage control to the GFY shark tank.
And of course it should go without saying you should add some language to your TOS to reflect your wishes on affiliates doing PPC campaigns. Affiliates don't know everything, and the general rule is "when in doubt abide by the TOS". If a rule isn't in there then it's usually assumed that it's not an issue.
Business 101 really. Fix the problem and move on.
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