I'm listing down the most common tricks practiced by some of the shady webmasters just to let you know what they are. These are not tips but a list of "do not’s" and warn you against using them.
Keyword Stuffing
This method is very common, used by even untrained professionals unknowingly. A huge list of keywords are created and put in tags in a single page. Most of them are duplicated, rephrased and do not have any character limitations.
Hidden Text
These are text which are set in the same color as the background and are not visible to human eye. But are created for search engines to trace them and increase keyword relevance.
Cloaking
This is a method of presenting different information, one for the search engines and the other for visitors.
Doorway Pages
These are pages added to a website solely to target a specific keyword phrase or phrases and direct traffic to another page. Most often these pages do not have any valuable content.
Duplicate Content/Sites
Having same content in two different pages of a single website and having two different domains with the same content will lead to a website getting penalized. Duplicate pages are commonly found in websites that have dynamic content, where the same content are displayed in different sections and the URL are not changed. Another situation is the site owner books two domains and has the same content in both these domains.
Now, if you find that your competitors are using the above black hat tactics and having an unfair advantage over you, then what you need to do is report them to Google and it is totally fair and ethical. Please also make sure that your website is for sure "black hat" free before you report them. It is being discussed that Google normally verifies the reporting party's website to confirm the authenticity of the complaint. Now did I scare by saying that? :-)
The URL to contact Google to report websites using SEO black techniques is - https://www.google.com/webmasters/tools/spamreport?hl=en
Be clean! :-)