Hi,
I also encountered this issue. Microsoft Rewards Support claims that this issue is because my "activities abused the terms of the Microsoft Service Agreement by earning points in multiple markets" and that "the decision is final and we will be unable to provide further assistance regarding this account or the transactions".
Please note that I did NOT earn points in multiple markets. I also did NOT use a VPN or used any other means of obscuring my location. I just earned points via the Xbox console and by visiting the Rewards website. That's the normal way of earning points! And now Microsoft just takes away my hard-earned points, provides nothing to substantiate their claims, and simply states that they are not going to provide further assistance.
Just take a moment to realize how fragile your position is when you invest time in earning Reward points or spend your money on digital games. I invested heavily in the Xbox platform and now it seems you can loose it all while not having done anything wrong. And it remains to be seen if there is any way for me to appeal. Microsoft's reply certainly does not seem to offer that possibility.
I know it is easy to think that I somehow brought this onto myself. Just know that I never shared my account, used it only from home (without a VPN), and did not do anything else with my account than earn points on the Xbox console and via the official Microsoft website. And this did not just happen to me. On Reddit more people are complaining about this issue without knowing what they did to deserve it.
Does anyone know if there is a way to start a complaint procedure or get this issue addressed some other way?