@ughosting we have learned to stay away from hosts who hold backups hostage as you've described. Reminds me of a joke I came across a few hours ago:
A biologist, a chemist, and a statistician are out hunting. The biologist shoots at a deer and misses five feet to the left. The chemist takes a shot and misses five feet to the right. The statistician yells "We got 'em!”
I once witnessed an inept provider suspend every account on a server because only 1 or 2 accounts had been in violation of his ToS. He gave no warning, i.e. the people effected were not aware of the violations until he inexplicably and negligently decided to punish everyone over them in a single clumsy brush stroke. He did as you've described, suspended everything and refused to provide backups after giving an inadequate amount of time, considering the circumstances, for the accounts to be migrated to a different server. It was a very pitiful display on the whole. The behaviour is typical of dull, callous technocrats who seem to have lost the ability to envision the people they're dealing with as something other than a blip on the screen.
I don't know you and I'm not trying to compare you or your company to this person's failure to grasp the concept of 'common courtesy', your post triggered the memory is all. I have no idea whether the suspensions you've dished out were 'deserved' rather than ignorant acts of arrogation. I guess what I mean to say is that a draconian suspension policy is not always the best idea.
Originally Posted by LampNetworks
How long do you keep client account backups after a client has failed to pay?
What are your polices regarding cancellation of a shared hosting account?
I sincerely think a lot of web hosts would find themselves losing less clients if they were to stop treating 'infractions' like a 'game over' screen in a video game and remember that there is a person on the other side, tbqh... it all depends on context, though!