Black Ops 2 filled with hackers

Unfortunately with older games, the Call of Duty games in particular, once a new version has been released, the developers tend to neglect the old versions and do not patch the games like they should to keep that from happening in the first place. However, the game can still be played so it's not exactly broken. You could always set up a game with friends to avoid running into those people. You can always try resubmitting refund requests, but other than that, there really isn't much else that can be done except to report anyone you come across who is violating the rules.

These games have had people cheating since the beginning. It does however get worse as time goes on since Activision doesn't seem to purge these people as often anymore.

This is an unfortunate aspect of the CoD series and one of the main reasons I stay away from it.  At this point the only option you would have is to report anyone you find cheating as well as immediately back out of the game and restart it.

When it comes to the refund policy of Microsoft, you must request one within 14 days of purchase and have 2 hours or less play time. It's possible that it was over 14 days or more than 2 hours play time. Black ops 2 is also a very old game so sadly there are still hackers since it is a 360 game, all you can do is report the people. Sorry for your experience with hackers!

I believe 

You could always record the hacking.

An try an get them banned from the cod

So there is no middle ground from a consumers' standpoint?  Either the game is "broken" or it works perfectly?  As I noted in my post, according to Microsoft Terms of Service this is how a refund request would be legally determined, and it was.  I'm asking if I have any expectation that the game will function as intended.  Your response tacitly acknowledges that the game does not function as intended ("the developers ... do not patch the games like they should to keep that [hacking] from happening in the first place").  If I have no expectation of game functionality - not simply basic operation - why should I buy any game digitally from Microsoft?  If MS does not stand behind the quality of their transaction, I'm better served to not purchase from MS.  Would that not be the logical conclusion?

Let me stress, I am not asking for any legal culpability from MS regarding the normally functioning status of a game they sell.  That is well established: it either works or it does not.  I am asking if this bare minimum is acceptable to gamers.  From the first few responses it appears it is.

These games have had people cheating since the beginning. You can contact COD developpers to try to ban hackers.

But it does function as intended. The single-player mode works, and the multiplayer mode works, although it does work at its best when you find a group of players who are not exploiting the game, so it is not broken. That would be no different than if your friends invent house rules for Monopoly and don't tell you until after you start the game ... you can't sue Hasbro over it, and the game isn't broken.

If the current functionality is not acceptable, you'd need to discuss that with Activision, and perhaps consider not purchasing any more of their games unless they take better ownership of their back-catalog. Microsoft sells Activision's software and has no stake in it. It is not in Microsoft's purview to patch Activision's code. It does not affect them if Activision does not sell another COD game on any of their platforms.

Ban members from cheat, is work to Treyarch/Activision

If my friends came to my house to play Monopoly that would be equivalent to me hosting a private game mode, not a public game mode with a lobby determined via a 2nd or 3rd party, so the comparison is dissimilar.  I understand the gist of what you are saying however, and it is a defense that while not compelling, is substantive.  Black Ops 2 has been historically purchased on the strength of its multiplayer modes.  Yes, people do play the campaign and zombies, but I think it is safe to maintain that the bulk of purchases have been to play the multiplayer mode.  Regardless, my purchase was made to play the multiplayer mode.  While it is operable, it certainly does not function as intended.  The base premise that hacking is to be reported underscores that rather than excuses it.  If the hacking was acceptable and "normal" it wouldn't require reporting.  

If the contention is that Activision and Activision alone are responsible for this condition it sidesteps several important points: 1) that MS terms of use disallow use of hacks or alteration of online experience, 2) MS sells the license for the game's use, and 3) consumers pay MS for access to online game modes via the subscription of Xbox Live.  To shuffle the responsibility for that license's maintenance to Activision is perhaps, legally conforming, but does it actually engender any confidence in MS as a whole?  After this series of legal contracts ("terms of use" "sells" "pays") listed above it is clear that a reasonable use of online multiplayer is part of the equation.  To wit: MS enforces their own terms of use by banning users and initiating disciplinary actions based upon reports of player abuse of online access.  Thus they clearly DO believe they have (at-least) partial responsibility to monitor access to games, and that responsibility is based upon an expectation of intended functionality.