Hi Billy,
The reason you're facing such a hard time is because Microsoft's security is designed to be highly automated. When a human agent can't verify your identity manually (which they are generally not allowed to do for free consumer accounts for security reasons), the automated systems kick in. When those systems fail due to technical errors or clever hackers, it creates a very difficult situation for the legitimate owner.
Since you need to contain the damage and regain control, here's what you should focus on:
1Prioritize Physical/Digital Security
The fact that the draft message keeps reappearing strongly suggests the hacker might still be connected or is using a compromised device.
Scan your systems: Run a full, deep antivirus scan on all devices you used to access that Hotmail account recently (PC, phone, tablet). Make sure your antivirus software is fully up-to-date.
Factory Reset Devices: Seriously consider a factory reset on the new mobile phone you were setting up, especially if the issue began around that time.
Disconnect Temporarily: Disconnect affected devices from the internet while you run these scans.
Navigate Account Recovery Form (Carefully)
The Account Recovery Form remains the single official path for you right now, as direct phone support won't bypass the automated security measures.
Wait out lockouts: You mentioned you're blocked for too many attempts. You must wait for this temporary lockout to expire completely before trying again.
Be Persistent and Detailed: Use a computer you typically use. When you fill out the form, provide as much information as humanly possible:
Subject lines of recent emails you sent.
Email addresses of your contacts.
Any past passwords you remember using.
This is your best self-service bet. It’s frustrating, but it’s the process Microsoft requires.
Manage the Damage Control Externally
You need to inform your contacts to prepare them for potential spam or phishing from your address.
Use a different email account, social media, or phone calls to warn everyone that your Hotmail account is compromised and they should ignore any messages from it, especially those with links or attachments.
Seek Official Guidance (via Chat)
While a phone number won't instantly fix this, you can use the official support portal to connect via chat to report the service error and the criminal activity.
Go to the Microsoft Support.
Use the virtual agent to describe your issue ("Account compromised, blackmail threats, recovery form failing").
Keep navigating the prompts until you are offered the option to __"__Chat with a support agent". This is your chance to explain the situation to a real person and ask them for guidance on the technical error with your recovery code and the ongoing security breach.