XBox Live Accounts & Credit Cards Hacked; Microsoft Begins Investigation

According to a CNet article, the aacounts of the XBox Live Online user's have been hacked and their credit cards have been used to buy virtual currency on XBox Live. Microsoft has begun investigating the possible fraud on its gaming network.

This has been confirmed to CNet by a Microsoft representative who said, "Recently, there have been reports of fraudulent activity and account theft taking place on the Xbox Live network. Security is a top priority for Xbox Live, and we are actively investigating all reports of fraudulent behavior and theft."

Apparently, there are three possible reasons for this kind of fraud which are:
1. Security breach in the system itself,
2. Tricking users to disclose the information within the game, and
3. A Phishing scam

Security researcher Kevin Finisterre has experienced it when he was threatened by his opponents of stealing his account while he was playing Halo. The threat actually became a reality when his girl's account was locked out next day as someone else was using the same account.

The actual picture will become clear only when Microsoft will make the results of its investigation public. Till that time, prevent your information on XBox Live.

Source