Bullet number 3 of the Microsoft Terms of Service.
Do not intentionally take advantage of a games vulnerability and use it as an expoit.
What your doing is essentially victim blaming. Because something is vulnerable does not make legal to do.
It's in the TOS contract. I hope they all get banned or at the very least a marker that tells other players they cheat.
Your role as a moderator enables you immediately ban this user from messaging (bypassing the report queue) if you select a punishment.
7 Day Ban
7 Day Ban
30 Day Ban
Permanent Ban
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