The investigation comes after gamers reported having their Xbox Live accounts hijacked and their credit cards used to buy "Microsoft Points," the virtual currency on Xbox Live, which has.
"Recently, there have been reports of fraudulent activity and account theft taking place on the Xbox Live network," a Microsoft representative said in a statement provided to CNET News.com. "Security is a top priority for Xbox Live, and we are actively investigating all reports of fraudulent behavior and theft."
Gamers have been reporting the incidents for some time in online forums--including on Xbox.com--and to Microsoft's Xbox help desk. Many users of the Microsoft console have been frustrated with the software giant's response to date.
"My Xbox Live account was hacked and all credit card info was stolen and used to run up points...Microsoft says: 'Oh, well, better call your credit card companies, nothing we can do,'" one user wrote on the Xbox Web site last month.
Security researcher Kevin Finisterre was playing Halo on a recent night with several friends when some of their opponents threatened to steal their accounts, he said.
"Literally the next day my girl's account was locked out," Finisterre wrote in an e-mail Tuesday. "I received a message on my Xbox that said: 'We are sorry we must log you out of Xbox Live because someone else is using your Gamertag.'" The account was banned. A "Gamertag" is a person's account name on Xbox Live.
Finisterre said that calling Microsoft was no help and that he got the runaround from the support people who answer 1-800-4MY-XBOX, the official help line. "My account is currently being investigated after about seven frustrating calls," he wrote. An edited recording of several calls he made is available on Finisterre's Web site.
While some users believe the security of Xbox Live was breached, others suggest that users were tricked into giving up enough information while in a game so fraudsters could call Microsoft to change the account information. Users may also have been duped into giving up their account information through phishing scams.
Microsoft asks any Xbox user with a question about the security of their Xbox Live account to call in. "An Xbox customer service representative will help them understand our security policies and procedures," the representative said.