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Managed.com was probably just following their own policy taking an offending box down. And if the box was critical enough to "ruin" businesses, I feel sorry for those businesses who got conned into putting mission critical stuff on a single, el-cheapo box.
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I'd have to agree with this statement. Managed.com is completely within their rights to take the server offline even if it wasn't seized.
Sites like that are serious threats these days, considering I received an email a week or two ago that was a PayPal spoof. In all my years of using computers, I must say it was the most authentic fake I have ever seen.
This is why webhosts shouldn't use total automatic account creation; and if they do, they should at LEAST audit the account within 24 hours to make sure someone like this did not sign up.
If the server was hacked, or a reseller added the domain...well, that's the server owner's fault for not properly managing it. In my opinion, people should make sure they know exactly what's going on with their servers in regards to what data is on them, and what sites are being hosted on them. Yes, this takes time...but is well worth it in the end when you prevent things like this.