Ignore what everyone else is saying, the solution is much simpler than having to call your ISP. All you have to do is go to your router and hit the reset button on it (usually it's tiny and recessed so you'll probably need a pencil or a pin to press it). That will clear all settings on the router, including the password. Then you need to go into the router's configuration UI using your PC and web browser (find out what its address is on your network, usually it's 192.168.1.1 although it can vary, and type that into your browser's address bar and hit enter). From there the first thing you need to do is set-up a new password and encryption. Now this is very important, so I'm going to make a big point of it:
!!!!DO NOT USE WEP ENCRYPTION!!!!
WEP is only slightly better than having no encryption at all. Anyone willing to do a little research and download one of the many hacking tools out there can break WEP passwords in under 10 seconds, hence why this guy was able to break into your router. Your router should offer two other kinds of encrytion, WPA and WPA-PSK. Use one of those instead. Much safer. Also, your password should be difficult to guess and crack. A good password is just a nonsense string of letters and numbers, with some capital letters thrown in for good measure. A bad password is an actual word, set of words, or words followed by numbers. A terrible password is something like "password" (most commonly used password btw), "qwerty", "123456", etc. Even though a good password like "nd8A903bcC2" might seem impossible to remember, a good strategy is to use a phrase that you'll remember and then take the first letter of each and use it as the password (and slap in numbers where possible). So for example, you could use the phrase "I am not letting you back into this router" to help you remember the password "14n1Y81tR". You'll notice that "1" took the place of all the "i"s and "l"s, "4" took the place of "A", and "8" took the place "B". You'll also notice that you can remember which letters are capitalized by knowing that only the nouns/pronouns in the sentence are capitalized (hence why "router" and "you" are "R" and "Y").
After you're finished securing the router, I would highly recommend making sure that logs are enabled (they should be by default) and that it's set-up so that everytime the log fills up and has to reset it gets sent to your email address (it would be a good idea to create an email address specficially for this as that account is going to get a TON of mail). That way if this guy ever breaks into your router again you have the name of his PC, his MAC address, and all of his internet activity, which will offer a lot of clues to help you figure out which neighbor it is.
As for security, the guy can't hack into your PC (well, maybe, but I doubt he's skilled enough or even wants to) although he can view any files and folders that you have marked as "shared", can access your itunes library when itunes is running, use your printer, and basically utilize anything else that's open on your network. What I would actually be worried about is what he's doing with your connection. Playing Xbox is harmless, as is normal web surfing. However, if he's involved in a lot of piracy downloading/uploading you'll be the one getting the calls and legal threats. And in a worst case scenario this guy could be a pedophile using your connection to download child porn in which case the FBI is going to come after you (and while you can get off it will not be easy and life is going to suck for quite a long time until you can convince them that it wasn't you. btw, this is another great reason to keep your router logs).
Also, it's worth noting that your ISP probably can't help you. If the guy got into your router he probably changed the password on you so even if you got the password your ISP used to setup the router it probably won't work anymore.
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