The thing is, he could be like a lot of parents who have no idea about how this stuff works. Not every parent knows shit about consoles or computers. A lot of parents don't know the CC info SAVES in the account info. Even when you just subscribe for Xbox Live gold, the CC info is saved and can be used for further purchases. I am not sure if parental controls can stop that or what extent parental controls have. And it doesn't even tell you the INFO is saved on the console. How could have he had known?
He could have set up his kids account, payed for it with his CC, and never knew the info is now stored on the Xbox. I mean shit, it's actually "hidden" pretty hard in the Xbox settings to remove payment options and then if you aren't bombarded with a errors trying to remove it (like I have been "unable to retrieve information").
Granted this could have been prevented if he watched his account info.