As I type this I have to note that Canada, Japan and myself would add the UK (and more broadly Europe) as the potential jurisdictions and that changes a few things, mainly as I am most familiar with US and UK/European takes on the matter and Canada and Japan are big areas for this but ones I am not as familiar with. Actually I say that but I am not even sure what laws this might fall under in those places I do know reasonably well, almost certainly a civil lawsuit would be the order of the but what it might be I have no idea -- civil lawsuits tend to be big on damages rather than "I took offence at their actions and want them to be told off by someone in a gown". Given you have the option to gain things for free I would love to see them explain the idea of a monetisation curve in court, and if they are going the theft of services route then that would probably be what they would do. There might be more options if you are the owner of a website detailing methods, doing the deeds or selling modding services. Short of something like those three though I do not see lawsuits being launched.
Back to reality though you would probably be in breach of some license and/or terms of service so yeah you risk your console and/or device being banned. If they have a means by which to revoke these badges and can enforce it (next online update or something) then would also be an option.
The closest I have to things like this would be Microsoft and their 360 stuff which saw modded saves, themes, dashboard items and more. MS had proper online infrastructure though and could issue bans, key revocations and more though.
like a 250 dollar kit back when DDR4 was Intel only