RhinoFish - 6:20 pm on Jul 23, 2011 (gmt 0)

you're assuming your client's retargeting list is the source of their competitors targeting...

if you visit your clients site, your visit there may trigger G to note your "interest" in that type of site/product/service...

perhaps your competitors are using "interest" based targeting to display their banners.

G will show you (or any consumer) what has been identified as your interests. visit your client's site, then go check what G says your tagged interests are:
google.com/ads/preferences