Watchdog reported that not only are users plagued with problems faulty units, Microsoft is attempting to charge customers with £80-£85 repair fee, after just a year of use.
Watchdog producers decided to go ahead with the programme, after receiving over 250 complaints from angry consumers.
Highlights have already appeared on video-sharing/tv-stealing service Youtube.
Microsoft has responded to claims by the BBC programme that it is charging excessive amounts for Xbox 360 repairs, and also stating that there is no systemic problem with the console.
In an official statement issued to GamesIndustry.biz, Microsoft said that the vast majority of Xbox 360 owners have had an outstanding experience with the console.
But Microsoft then conceded: "That being said, we have received a few isolated reports of consoles not working as expected. It's important to note that there is no systemic issue with Xbox 360 - each incident is unique and these customer inquiries are being handled on a case-by-case basis."
Microsoft has still not revealed details of how many Xbox 360 units have been found faulty, but did state that the return rate is significantly lower than the CE industry average of between three and five per cent.
Interestingly, we've had confirmation from a reader that the infamous ' towel-wrapping' of a faulty Xbox 360 does indeed work. Its thought that the over-heating caused by the towels resets the problematic lead-free solder around the embedded BGA graphics chip, allowing it to reconnect to the motherboard socket properly - at least temporarily.
Please note, we won't be offering any compensation if you try the towel-fix and things go wrong. We suggest paying the £80 to get Microsoft to fix it for you, instead of possibly burning your house down. µ
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