Max Payne 3 developers Rockstar have come up with a tidy solution to the problem of dealing with online cheaters: throw them in the same room together and let them kill (or at least annoy) each other.
Here's Rockstar's explanation:
Anyone found to have used hacked saves, modded games, or other exploits to gain an unfair advantage in Max Payne 3 Multiplayer, or to circumvent the leaderboards will be quarantined from all other players into a "Cheaters Pool", where they'll only be able to compete in multiplayer matches with other confirmed miscreants.
The sight of cheaters trying to out-cheat other cheaters is something Rockstar should film then distribute. I know I'd watch it.
I know Battlefield 3 is too big a game to do the same, but boy, in my dreams this is something nearly all developers could implement.
Taking Aim at Cheaters in Max Payne 3 [Rockstar]