You can acknowledge that fan fiction is being made of your story, but to read the fan fiction written can cause legal problems. I wish I had some websites to the court cases on the subject caused between disagreements with the writer and the fan fiction writer. It's all really personal choice on the subject. Professionally, my personal opinion is that I wouldn't acknowledge it though it is flattering. So if it happened, it happened, I don't think I would press charges as long as it didn't interfer with what I'm trying to achieve as a writer.
I know a few cases and have run into it, where a fan fiction writer is actually making money off of rewriting an author's work. Author's don't make much money as it is. Your first book, if you are lucky might sell for between 5,000 - 10,000 dollars. The publishing house has to make that money back by selling your novels before you get royalities. If someone has rewritten your novel, you are pretty much halving the cost of your intellectual work.