No matter what Google tells about negative SEO, it does work. Competitors have cleverly used negative SEO to outrank genuine quality sites. Yeah..Yeah. Google has justified the penguin update and have said that negative SEO has little impact on well-known brands. The impact has been for scrapper sites and sites that used Black Hat SEO techniques. But small niche brands have to start somewhere before growing into a well-known brand and there is plenty of evidence that links from bad neighbourhood, created by competitors have affected niche mom and pop Businesses and other editor controlled websites.
Interestingly, Bing Webmaster Tools has heard the woes of Webmasters around the world and has introduced a new feature - Disavow Links
What can you do with Disavow Links?
You can submit pages, directories and domain URLs of suspicious sites (spam or low quality sites engaging in black hat SEO) with links to your webpages
Where can you find the Disavow Links?
The Disavow links is on the left sidebar under ‘Configure our site’.
Disavow Links Interface
You can pick page, domain or directory URL and include it under ‘Enter a URL’. Click start disavowing links to disavow the URL
Sign up for Bing's Webmasters Tool