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My thoughts are as follows:
1)You have just learned the meaning of the phrase, "if it sounds to good to be true, it probably is". What (at least most of) these bottom basement budget hosts offer is impossible to attain - and when you utilize the resources that would enable you to reach your limits, they pull this crap...
2)What they did sucks. They should have provided an upgrade option or offered a pro-rated refund. BUT this probably IS in their terms, and even if it isn't, nobody in their right mind will sue for 40 dollars.
3)Find a real host.
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