It happened recently on a flight MUC-CDG, running an hour late. A passenger decided to sit down in Business with his Eco ticket, claiming it to be compensation for the delay..
The FA asked him twice, nicely to move to the seat asigned to him. We had engines running, slot ticking, so I decided not to go back there when the FA came to the front the third time, telling me the PAX would like to know the Captains name and was not going to move...
I got out a business card with my name on it, gave it to the FA and told him to let the passenger know that after this time, his next choice would be to leave the aircraft voluntarily or in handcuffs.
After all, upgrading yourself does constitute fraud.
Nic