They’re constantly developing technical updates to prevent undermeshing, as described in a recent livestream.
As for reporting them, you probably know all this already, but linking the guidelines for reporting cheating and other naughty behavior for the benefit of others, anyway. The more details and evidence you can provide, the more likely Funcom is to take action (and they evidently do take action, because people are complaining on the forums how they’ve been banned).
As you said, they’re probably receiving a lot of reports, so it may take them some time to take action in any individual case.