Do it again, a fourth time, and your account is 'unsubscribed'. I guess that's a more nicer word for perma-banned.

So if a cheater does a 'night of cheating' and all 3 opponents report him, I guess he'll be suspended right away. Let's say he comes back again the following night to do it again, the good news is he won't be allowed online.
I guess they could make another account (even though on 360, it'll set you back another £20 or whatever) but given what's just happened, why would anyone have any motivation to cheat again?