Are the concerns over a potential security flaw in the Xbox Live network unfounded? While Microsoft isn't disputing that many Live users have been complaining of stolen information, including credit card numbers, the company insists that the information was not lost due to security breaches:

Hryb does not deny the claims of Xbox Live users who have had their information stolen, but says the reports of fraud are not a result of a security breach. "There have been a few isolated incidents where malicious users have been attempting to draw personal information from unsuspecting users and use it to gain access to their Live account," writes Hryb, without any further details on how those few isolated incidents occurred.
Interestingly enough, there's a planned outage of the Xbox Live network next Tuesday that will last for 14 hours. If Microsoft is to be believed, then these people may just be victims of circumstance or poor protection of their own data. And yet, it seems the incidence of these stolen accounts is increasing.