I must state my intentions here - I'm a systems administrator at Memset.
Any web hosting company worth their salt will suspend/deactivate any web site that has been compromised. WordPress has had it's fair share of vulnerabilities over the years that have allowed hackers and phishers to upload their own content. Joomla also has suffered it's fair share, and we've seen many compromised sites who have not updated when security updates have been released.
What happened in the original poster's case was that he was running an insecure version of WordPress and a phisher had found and exploited a vulnerability in the WordPress (or plugin) module that allowed them to upload the phishing site. We suspended the account because (a) we had received complaints from our upstream provider and (b) it is a potential threat to our other customers, our server and our network.
When phishing sites are detected, what happens is that the security companies acting on behalf of the company that the phishing site is trying to spoof will contact both the web hosting company AND their upstream provider. Whole servers and networks can be blacklisted, null routed and various other fun things if they do not remove sites/code/whatever that is a threat to their operations.
In the case of unmanaged web sites at Memset - it is assumed that the customer is fully responsible for the system administration and maintenance of their own web site INCLUDING security patching, etc. If not, sites are suspended. We have to do this to protect ourselves and other customers, as I have said. On the shared hosting service, we manage the main OS patching, Apache patching, MySQL patching, etc. but it is up to the customer to ensure their applications are kept patched and up-to-date.
Unless you're on a fully managed support contract with *whatever* web hosting provider you're using, I am confident that pretty much every other web host would have done the same thing in our position.
I am thoroughly disappointed with some of the ill-informed comments on this thread. Surely most of you should understand that patching software such as WordPress, vBulletin, Joomla, etc. is very important - as is keeping yourself informed of what security vulnerabilities are out there.
Regards,
Martyn Drake
P.S. - It's not particularly polite to repost private communications on a public forum.