I was personally deceived by 2 web hosting companies and it absolutely enraged me. The first one was racksmart.net (chris Gotzmann Treto) a partner site of e7web.com (Mike Anderson). I paid them with paypal, they never setup my server and when I went to paypal for a refund/chargeback paypal told me dedicated servers are intangeable and not protected by their AUP/TOS. So being deceived, lied to and then not getting my money back is #1 for me.
Second situations I had was signing up with a web host: poundhost.com. Their bandwidth was dirt slow 200ms+ pings globally when they promised me 2M, tech support and server reboots took 12-15hrs, and the hardware they gave constantly broke down, overheated or crashed. The guy who runs poundhost.com came off as a real sharp guy before I paid him, after I paid him he turned into a total flake and didnt care 2 cents that I was literally in tears that my site was down everyday for approx. 12hrs. I invested thousands of dollars into google adwords and lost those thousands as people where clicking on links to my site and never reaching my site. I finally had to nip that in the bud until I moved the site to a reliable host.
Poundhost.com actually gave me a refund finally after demanding it for 2 weeks, so atleast they are honest - Incompitent - but honest. Racksmart.net where just straight up scam artists.
#1 Deception, Lies and Scams
#2 No giving what you promise(Talking the Talk, then flaking out)
#3 Poor Customer and technical support
#4 Not taking clients needs seriously
It deeply angers me how many scam artists are out there and how over saturated the market is with web hosts. The actual quality of webhosting is down over all in my opin. and there is too much losing money and "lessons learned" going on. I hate government regulation, just as much as I hate censorship, but I really think it might be time to start regulating web hosting. Too many nightmare and horror stories of people losing thousands of dollars and their shirt over simple incompitence.