Office 365 pre-upgrade users who use Microsoft Office Outlook 2007 and Microsoft Outlook 2010 don't receive notification when their password is about to expire or when their password has expired. Additionally, Outlook enters a disconnected state when a user�s password expires and doesn't let the user know what the issue is or what action is required to resolve the issue.
This issue is fixed in the Outlook 2007 hotfix package and the Outlook 2010 hotfix package that are dated August 28, 2012. For more info about these updates, see the following Microsoft Knowledge Base articles:
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