People caught using the hack do indeed get banned, temp and perm both, and most of them simply buy another copy of the game and create a new account, simple as that, and something you can do with just about every single online game out there. Not a good business choice to permban someone's computer because they spent a few hundred dollars to get a hack to use in your game, better to just ban their account and let them have the option of buying your software AGAIN to play again, after all, you can always ban that account if they mess up again.
It IS quite easy and possible to permban people in such a manner that they can't just rebuy the game, doesn't really take much, just get hardware ID's from the system, and no I don't mean the Windows provided hardware ID, that's easy as hell to spoof, has been for years. I mean the actual hardware IDs that the BIOS has access to that can't be spoofed, a system used by Even Balance against anyone who tries to hack their database for the Punk Buster anti-cheat software. Hack creators have spent may thousands of dollars thanks to that system because they have to literally replace most of their computer's physical hardware like the cpu, vidcard, hard drives..just some of the hardware IDs that can be obtained. But that's not something that's done very often, as I said, bad business decision, most hack users today spent money to get the hack, they WILL rebuy the game to play it again if they get their account banned, so account bans are all that's done. There's more going on behind the scenes, such as watching anyone who's been banned previously if they return, after all, they know who you are, hardware IDs, as I said, very easy to get and track.... Let them spend more money, come back, and as long as they play nice, not a problem, but if they muck about, insta-permban. Seen it, many companies doing that these days, it's just good business.
As for false positives and people NOT using hacks getting banned...I worked for server hosting companies for years actively hunting hack users, and I've never seen a single case where someone busted for using a hack was NOT actually using a hack. This isn't like testing positive for dope because you ate poppy seed buns, there's no testing going on here, the proof of hack usage can't be 'accidently' duplicated on an innocent player's computer. If someone got busted for using hacks, they DID use hacks.
Recently, within the couple of years, top 3 players in CS:GO were busted for using hacks, all 3 denied it vehemently, swore they didn't use hacks, it was a mistake, people were out to get them, whatever. 1 guy, a year later, finally admitted he and the other 2 were actually using hacks. The other 2 still deny it, even though their friend stated they were all using them and they all knew it. I've busted people using hacks and they swore up and down it wasn't possible, they didn't do it, didn't even know there were hacks, etc, etc. One individual swore on his KID'S LIFE that he didn't use a hack, someone else must have logged in with his account and done it, he was hacked or something. I happened to have the guy recorded by a friend of mine while he was using the hack he didn't know anything about, bragging about how he was using the hack, no one could do anything about it, he'd just say someone hacked his account or something. Or the guy who swore his kid installed the hack and he didn't know anything about it. Only his kid's login was clean, it was the dad's account that used the hack, always late at night where the guy was located too, while HE was on playing with us and using TS so we knew it was HIM, not his kid. My friend, my neighbor, my kid, my spouse, someone hacked my account, aliens(not a joke, been tried), sunspots(also been tried) and on and on, the reasons why the person busted using the hack could not possibly have been using the hack are countless, and usually pretty damn stupid. There are no false positives when you are caught using a hack, proof is usually pretty simple, pretty solid and impossible to deny, such as screenshots of your screen while using said hack, images of your computer's system while the hack is running, things like that.
So the folks who get busted and deny everything, lying. Hacks aren't something you don't know are running, you don't accidently have them installed and running while you play the game they work with. Spent too many years hunting down and busting the people who use them, 1 in 20 will admit it, the other 19 never ever admit it, seen people at LAN parties deny using a hack we could all actually SEE on their monitor in front of us, so...