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It sounds like you are still using the mic on the laptop. Because you are far away from it, it sounds like echo.
Make sure the phillips headset is selected in the Windows mixer.
Make sure you are plugged into the mic jack on the laptop.
Make sure the mic is not muted. This is a default setting.
I had the same exact problem with a brand new x32 headset. right out of the box it was echoing for my friends. Also, if I muted my mic it would kill the chat volume (ie barely even audible). I switched the voice to play through speakers and it worked flawlessly after that.
Not sure if it is a hardware issue with my controller (my other headset worked just fine) or if it is a defective cable I received, or a design flaw with the x32. If you are looking for a work around, try setting it to play through speaker.
I found this on the Turtle Beach website:
If you or other players hear echoes in Live Chat:
Does it happen if you use the Microsoft communicator?
Mute the microphone on your headset. Does the echoing stop?
In the Xbox Dashboard > Settings > Live, set the voice to Play Through Both and unplug the talkback-controller cable. Does the echoing stop?
Echoing can sometimes be caused by high latency ("lag") on your internet connection. This may come and go depending on how much bandwidth is being used in your area.
If your talkback-controller cable's plug gets dirty, this can also cause echoing or static. Also check the input jack on the controller and make sure no foreign objects are in there.
Read these links for more advice:
Echoing can be caused by "a poor connection between the headset and the controller."
"The most likely cause is either a plug that isn't pushed all the way in, or gunk on the plug."
"If you hear echo, then... someone in the chat session... needs to clean off their metal headset plug."
It sounds like your microphone volume is too loud. Get someone on a call with you so they can tell you how it sounds as you adjust it. Turn down the mic volume by pressing the + & - buttons on the earpiece together once which puts the earpiece into mic adjust mode. Then decrease the mic volume by pressing the minus button a few times until it sounds right. The earpiece will automatically revert to normal mode within a few seconds.
If this doesn't work it may be that you need to adjust the compatibility setting for the new phone. This is the small black dial on the base station. The most common setting is 'A' but you may need to experiment with other settings for that phone.
It might be a problem with their sound setting. If their speakers are on while using the mic, they might get some feedback that could be the cause of the echo. They may even just have to tweak their mic settings (through the control panel sound options or their soundcard options).
How long have you owned this mic?
I am a recording engineer, so I have seen any kind of damage to mics you can think of. Headset mics are a little more susceptible to high-volume damage (especially game console mics, usually due to intensity of the game!)
I have never dealt with Mad Catz customer support directly, but sadly, in most cases the unit needs to be replaced.