first, i can easily get a code black listed, but beware, all black listed codes can be investigated, so you as a vendor ( you are right?) can be investigated...if they can find you.
so i wouldn't recommend you do that, i however would suggest you do the following. NOTE: i wrote this assuming you live in america.
call good o'l Microsoft and tell them about this, provide proof that you are in fact the original owner of the # and then ask that the code be frozen until you solve this dispute.
if Microsoft refuses to freeze it, call again, (you'll get someone else) and say that you believe your code to be stolen, hacked, whatever. they will then close that code, and give you a new one.
for future advice:
if someone disputes a payment with you, simply call the credit card of debt or what ever copy, get transfered to a manager or someone higher than a call taker, or send an email.
and simply say with absolute seriousness that you will sue (what ever company) until you get you money, clearly state that the transaction was complete in full legal terms.
also state that Microsoft has been notified and that the account has been frozen, also state that Microsoft isn't very happy about someone screwing its account vendors, (this is why emailing is better than calling, because here you can forward email to the credit company)
lastly state, failure to provide monetary value for an item bough legally from you is fraud and stealing, and since (the credit company) is aiding the stealer, they are in violation of the law,all crimes punishable with jail time and heavy fines, in America.
remember, the law system in america takes a very dim view of people stealing and committing fraud (online or not). you can use this as leverage on any company.
how do i know this? ive had disputes over
wow account sales, with visa and discover and both company's have apologized and given me my dam money.
good luck.