I have had the sam problem with Microsoft's Xbox live billing practices that others have. I signed up for a 3 month xbox live promotion and absolutely feel I have been ripped off. I am not a gamer who plays online a lot, so I will just usually buy a Live Card whenever I purchase a game that I may want to play online. When I saw the promotion I thought that it would be a good deal for 3 months and that after that time I would just go back to the Silver membership (free, without the ability of multiplayer online).
I ended up not even really using the 3 months of gold, and only playing online a few times. I got really busy and didn't play the xbox at all for about 5 months, and had assumed that my promotion had ended and the subscription went from Gold back to Silver. Low and behold when I log on and my xbox automatically tries to connect, I get a notice saying that I cannot connect to Xbox Live at all (Silver or Gold) because my account has been suspended. I initially thought that it was a mistake, but after it kept popping up I finally called Microsoft. I was told that the subscription auto renewed and that when they went to take their 3rd payment it was rejected. I was not aware of the auto renewal (fine, I'll accept responsibility for not reading the fine print on that one), or that I had been charged again. I asked about the fact that I had not used live in months, and why would I have money due? If there had been a problem charging the card why didn't they just cancel the subscription? I was told that for some reason they took another month before cancelling and in order to go back to a Silver membership I would have to pay the full price for another 3 months! I can't prove that it took this long for them to cancel because I hadn't been on for months and I have no idea when they really suspended my account.
My problem is that they should have cancelled the subscription if they couldn't get the money for it and it's absolutely ridiculous for me to pay them another 3 months to get it turned back on when according to them they cancelled it after a month. I offered to pay the additional month just to get everything settled and they refused. I could get a new gamer tag and start again (as suggested by the rep that I spoke with), but then I will lose all my downloads and add-ons (I originally downloaded them on my old xbox and used my xbox live connection to transfer them to the new).