Microsoft has said that it's aware of and actively hunting for Halo 4 cheaters using the headless Spartan exploit.
Players have reported encountering headless Spartans in multiplayer games, with the offending Spartan seemingly lacking any armor.
According to Kotaku, this is achieved using an unofficial mod, which can only be applied using a modified Xbox 360.
Microsoft has issued a statement to inform players that in regards this cheating and will issue bans, and that while the cheaters appear headless, their hit boxes remain intact.
"We are aware of the issue and have already taken action to identify and ban the accounts of these modders and cheaters," said an MS spokesperson.
"We want players to know that while the mod makes a player's head and armor appear to be invisible, the hit boxes are still intact, so competing players can still defeat them as usual. While the problem was very isolated, we will continue to diligently identify and take action against all offenders."