This error most likely is connected to the need to verify the ownership of the account, because the password has been openly published by hackers on the Internet. Solving it may require changing the password or changing the security information, or 'proofs' behind the account.
A) Since these web pages are .ASPX pages, these steps are best done with Internet Explorer. If you don't have IE, Safari or Firefox are better than Chrome.
B) Go to http://account.live.com and sign in there with the Microsoft ID (formerly the Windows Live ID), the email address used to create your XBL account. If you see any message about a Blocked Account, follow those instructions.
C) Click on Change Security Info to add 'proofs', security data needed to recover your account and verify your identity. If so, please provide that information: Add in the your cellphone number, an alternate email address and the Security Question and its Secret Answer. Save the changes then verify the 'proofs' you have just provided.
D) Sign out, go back to http://account.live.com and sign in there with the new Microsoft ID.
E) Go to http://xbox.com and sign in there. If you see any message about a Blocked Account, follow those instructions.
FYI, there are three email addresses in the Xbox system for every account.
1) The Microsoft Account, also known as the Windows Live ID, which is used to sign in at websites and download the profile to the Xbox. If that's wrong, you can keep using it until you have time to contact Xbox Support support.xbox.com/contact-us for help with your account. You can change that at account.live.com/summarypage.aspx by selecting Update Email Address
2) The alternate email address which is where password reset messages are sent. You can see that at account.live.com/summarypage.aspx and change that by selecting Edit Security Info
3) The billing contact email address where billing statements are sent to. You can see and change that at http://xbox.com/accounts by choosing Billing Contact Information
2 & 3 can be the same. Ideally, 1 should not be 2 or 3 but they often are.