Microsoft Points dumped, hackers thwarted?

Microsoft will dump its Xbox Live point system by years' end, according to reports, in a move that could kill what is a cash cow for fraudsters.

The Microsoft Points system was used to purchase gaming content on Xbox Live.

But it was also used by scammers who etched out a grey market selling hacked Xbox Live profiles loaded with Microsoft Points.

SC Magazine previously visited dozens of lawless auction and retail sites that freely sold Microsoft Points for a fraction of the cost charged by Xbox Live.

One method used by scammers involved hacking Xbox Live profiles and loading them with  Microsoft Points purchased using credit card and PayPal details that stored with the profiles.

Hackers then purchase Family Packs that open new Xbox Live accounts linked to the hacked profile.

The Microsoft Points are then transferred to the new accounts which are sold for bargain prices online.

Content bought with stolen points will remain accessible on Xbox consoles even if the fraudulent account is removed.

Sellers try to make the deals appear genuine. In at least in one case seen by SC buyers had claimed ignorance of the scam.

Abolishing the point system could eliminate the profitability of stolen accounts since cash could not be turned into credits and sold off to gullible buyers.

Microsoft has maintained that the stolen points were due to users falling prey to phishing scams, keyloggers, or reuse of compromised passwords.

However many victims have denied they have fallen prey to phishing.

Points would be scrapped from Xbox Live, Windows Phone, and the Zune marketplace according to insidemobileapps.com which cited an anonymous source.