The reason it’s so important to prevent click fraud is that it does financial damage to your company. You pay for your PPC ads based on when people click on them. Usually, people click on ads out of interest, so a significant portion will lead to conversions — enough to generate an overall profit.
But click fraud never comes with any intention of converting. So, if your ads start getting spammed with fraudulent clicks, it means you end up spending money on your ads without earning revenue in return.
Furthermore, click fraud will skew all your data. You can’t accurately judge the quality of your ads, because you can’t see what percentage of the clicks are from actual leads.