BanCandy is no longer active.
VAC is not the only thing we should be afraid of, this is easier to evade though and BanCandy is not especially active. 5-10 daily bans world-wide as far as i can see. They are getting more and more active though.
BanCandy is an employee from Infinity Ward (the developer of MW3) that is capable of banning people if she has evidence in form of a video. BanCandy is now IW's official manual banner. There has been other ways to report MW3 cheaters, but fourzerotwo has stated that all reports should go to BanCandy and her new workmate called Banstache.
BanCandy is not booster/cheater hunting themselves.
Anyone can record a killcam or take footage from theater mode, send it to them and you will probably get banned.
If you see someone called BanCandy join your game, you should stop hacking or leave. It does not really matter if it is them or not, because BanCandy bans are manual. It can be someone that is cheater/booster hunting and records footage of them.
If you have emblem/title/stat hacked to obviously hacked stats you can reset your stats and be lucky. They might ban for resetting stats too though. So if you wanna be sure don't edit your stats to unrealistic numbers.
If you think someone has recorded you while cheating, you should leave and change name as fast as possible and hope the person didn't get your steam profile. If you change name fast enough he doesn't know who is you in his recent players
This also counts on consoles. It is not possible to change GT/PSN though.
UPDATES: This is now what her twitter says: "Infinity Ward Security in MW3 against cheaters. My workmate Banstache will also take your reports!"
BanCandy bans are NOT VAC bans
I will not post any information about how to report because this is one of the biggest CoD hacking sites and we don't want our members banned.
If you have anything to add; post it and I'll add it.