Source: http://xbox360.gamespy.com/articles/750/750705p1.htmlBack when Microsoft released the fall update for the Xbox 360, a number of people reported that the new download ended up killing their systems. When we contacted Microsoft for a statement regarding these reports, their reply was, "A small percentage of consoles (less than 1 percent) were affected by the Fall Update. An updated version of the Fall Update was made available on Xbox Live on November 1 which eliminated issues relating to new or refurbished consoles malfunctioning after applying the Fall Update."
The company also adds, "Xbox Support is paying for the shipping and repair/replacement of all Xbox 360 consoles that malfunctioned as a result of the Fall Update on October 31, before it could be fixed on November 1. They just need to phone Xbox Support and give them the proper error message indicating it was the Fall Update that affected their console."
For Xbox 360 owner Kevin Ray, this is too little, too late. Ray downloaded the fall update at the beginning of November, after Microsoft says it fixed the update. This download resulted in a nonfunctioning Xbox 360 console for Ray. After contacting Xbox Support, Ray was told that Microsoft would not pay for the cost to repair or replace his console. On November 29 Ray filed a class-action lawsuit against Microsoft on the behalf of consumers who experienced Xbox 360 hardware failures after downloading the fall update.
The official complaint filed by Ray's lawyer says, "The members of the Class for whose benefit this action is brought are dispersed throughout the United States ... Plaintiff believes that Class members number in at least the thousands." The complaint also says, "Despite acknowledging the existence of the problem, Defendants have refused to make complete restitution to owners of Xbox 360s damaged by the Fall 2006 update." Ray's class action complaints are for breach of contract, violation of the consumer protection act, and negligence. The suit seeks $5 million from Microsoft in damages to affected Xbox 360 users.