I, for one hate cheaters!
Modded controllers are hard to detect because they are external modifications. However, hacks and aimbots can be detected. But only through players who report cheating by modded controllers can they be dealt with. Depending on what they've done based on the level of douchebaggery, cheaters have been banned either for days, have their ranks reset to level 1 or banned (by profile, console, or permanently).
You can report cheaters to @ATVIAssist on Twitter or Facebook, or email email@example.com.
Be specific on what to report to them. Mention the game system first followed by the gamertag/PSNID and a short explaination on what was witnessed.
Xbox: gamertag123. Modded Controllers at Fallen Map, 3:30pm
They will then look into that gamer's recent matches as well as check out their played games.