From Halopedia, the Halo wiki
A ban is the denial of a person or group's access to a service or resource. Bans are typically enacted by people in positions of authority in response to rule violations committed by an individual. The ability to ban is sometimes satirically referred to as "the banhammer".
In the Halo community, bans are administered by Bungie staff members when users break the rules for in-game conduct. Furthermore, the term "Banhammer" takes on a new meaning in the context of Halo gameplay.
Bungie's banning system, commonly referred to as the "Banhammer", is an advanced anti-cheat mechanism used to regulate user activity in Halo 3. A July 2008 Weekly Update stated that the system was being upgraded; the same update announced that the presence of modded content on a File Share would result in a ban. It also may have hinted at the then-unfinished "Ultra Ban".
A Bungie Weekly Update in August announced that the Banhammer was upgraded with new features designed to crack down on File Share violations. The update also elaborated on specific File Share-related rule violations.
Halo 3's September Title Update introduced the "Ultra Ban", which was applied retroactively to those who had committed severe rule violations in the past; the ban is documented in more detail in its section below. Various other anti-cheat systems were also introduced, though they were not elaborated on; an additional weekly update identified the system as "Banhammer 2.0".
The Banhammer is capable of administering bans automatically and it keeps extensive records both when a ban is administered and during the course of normal gameplay; records taken in the latter instance can then be analyzed to detect cheat-related behaviors. It is also known that Bungie employees can manually strike with the Banhammer.
Types of Bans
An EXP ban prevents players from earning EXP from ranked playlists in Matchmaking. Such bans are usually temporary.
Voice bans may be administered when users misuse or abuse the microphone during a game. Excessive vulgarity may result in a voice ban. Such bans prevent players from using the microphone to verbally communicate with other players.
File Share Bans
Players can also have their File Shares taken away.
The so-called "Ultra Ban" was introduced in Halo 3's second Title Update. The ban prevents players from playing any form of online Multiplayer, including Matchmaking and even Custom Games; it also prevents players from organizing parties in the Theater lobby.
There are a variety of actions that can result in a ban. Note that this list is not comprehensive.
EXP boosting, skill boosting, level reducing, habitual quitting, cheating, and standbying are all easily detected by the Banhammer and usually result in either Matchmaking or EXP bans. Achievement boosting is not a formal offense, but the Banhammer often mistakes it for EXP boosting and bans it as such. Attempts at EXP boosting by playing with inactive guests (that is, additional controllers without additional people) can also be recognized by the Banhammer and will result in EXP bans.
In Halo: Reach, quitting three matches in a row will put a player on quit probation for three days. Every time a player on probation quits a match, they will be banned from Matchmaking for fifteen minutes. Players who quit excessively -- to the point that "the normal quit probation punishment is obviously not having an effect" -- will receive more severe bans.
Authors of modded content will receive permanent Matchmaking and File Share bans as well as one-month console bans if the content is uploaded to a File Share. Note that this applies even if the content is uploaded by someone other than the author; also note that when a player renames a file, they become its new author. Uploading modded content to a File Share will result in a File Share ban, even if the uploader did not create the content.
The above policies were enacted during July of 2009.
Uploading offensive content to a File Share can result in a File Share ban. This includes, but is not limited to, racist and pornographic content.
Contrary to popular belief, uploading screenshots and film clips of modded content will not result in a ban, provided that the screenshots and films themselves aren't modded. As of August 1, 2008, there are no rules against downloading modded content to one's Xbox 360.