Check your mic settings
Had a similar issues where I couldn't always hear xbox live chat conversation. Sometimes it would work, other times it wouldn't.. not 100% sure why though.
Tried different xbox, different controller and different Turtle beach head sets with similar issues
Setting the mic output to speakers allowed me to hear what people were saying at the expence of not being able to easily control the chat volume with the analog volume control on the chat head set cable.
Hope this helps
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