My game group's standard technique is described as "A DM-only spell, no SR or Save, which can be used as often as needed. Components: V. Spell name: Dispel BS" (We usually expand on the BS part, but the rules here don't allow it.)
Many has been the time when I find a new player wanting to join the game, presenting a character created with the MAgic Pencil of Anything and the Decanter of Endless Nonsense. One casting of Dispel BS and the sheet is a blank piece of paper. Then I tell them to start over.
We recently had to do this. A prospective player wanted to bring in one of his "legacy characters", an Orc Paragon with something like seven classes and more odd abilities than could be explained in Character Sheet volumes I-VII.
After the Dispel BS was applied, and we asked him to start over, creating a character using only the books we were using, and staying within appropriate budget for equipment (which inherently says "no artifacts"), he said that he had an active aversion to creating new characters. He proposed a different "legacy character", equally insane, equally inappropriate for the campaign, and was turned down again.
The only time we've seen him since them was when he dropped by to explain why he wasn't dropping by. Drafted to run a campaign at the local game shop. (I asked at said local game shop and it was news to them.)
Dispel BS: Use it early and often!