I Have been an xbox live member for over 8 years with the same account. I received a 2000 point card for christmas and was attempting to download a game add-on when this error popped up. I punched it in and it says my account has been banned.
About 3 months ago my account security was suspect and someone tried to steal my account. Luckily the e-mail alerts kept me from losing the account. They were able to download a game and purchase points using my account. This has been the only thing that has been suspicious that I can recall.
I have never made a modification or hacked a game for any reason. I would really like some explanation as to why I can't even use points already on the console.