Following the shut down of websites by Fasthosts, businesses are facing large financial losses and are beginning to question the legitimacy of the hosting company.

Fasthosts shut down the websites of its customers, irrespective of whether customers changed their passwords or not, after computer hackers accessed Fasthosts’ “master database” where information such as addresses and bank details were stored. Fasthosts said it issued its customers with letters advising them to change their passwords.

However Chris White, the owner of targeted website EU Reporter, said his business never received such a letter and the first time the business became aware of the situation was last Friday when “they took the site down and we couldn’t get in!”

“It did not even say the site had crashed, it just said it was unavailable. We run a news and commentary site and it is detrimental for an online business to loose communication with its readership for a number of days,” White said.

“I don’t even care if people had hacked into our site, we’re not even doing any commercial actions,” White added.

It is unclear why Fasthosts decided to take such swift action removing many of its customers’ sites at the same time, although competitor Rackspace has said it is because Fasthosts is a shared hosting provider. Shared hosting with multiple clients also creates more security issues, Rackspace said.

Not only does White’s business face a cost of about £3,000 to remedy the problem but, after being in the business for ten years, White expects the EU reporter will have to “start from scratch again.”

White expressed his frustration at not having been contacted by Fasthosts.

White also pointed to Fasthosts’ previous actions in removing websites for political reasons. One example is Boris Johnson’s webpage being disabled after Craig Murray, the former British ambassador to Uzbekistan, made allegations about the Arsenal shareholder Alisher Usmanov. The allegations also led to Murray’s site being taken down, as well labour councillor’s, Bob Piper. Currently, Johnson’s office declines to comment on the incident.

White has said the EU reporter will now use US host provider IPowerWeb, to avoid restrictions on freedom of speech. The incident has raised questions on whether host providers should be counted as publishers when it comes to liability considerations.

The incident has also raised questions on service level agreements between host providers and their customers. White has said those targeted are starting “class action.”

But Fabio Torlini, Rackspace Marketing Director, said Fasthosts have “lax SLAs [service level agreements]” and he doubts that it will pay its customers compensation. Torlini said the fiasco will “kill them [Fasthosts] in the business-to-business arena". Although there are many discussions that take place around service level agreements, it is really how businesses act when there is an issue that matters, said Torlini.

Fasthosts has apologised to its customers who have been affescted by the password changes but talking to IT Week a spokesman said, “unfortunately, the measures were necessary to fully ensure our customers' websites and data were secure.”

The internet service provider added that “the password change was applied to a significant portion of the Fasthosts customer base who hadn’t changed their passwords following our initial announcement about a network breach in October.”

“Certain customers who did not change their passwords as was previously recommended, and whose websites utilise automated databases, may experience website downtime as a result of their database passwords being automatically changed. However, any such customers whose websites may have been affected by this should now have received their password and would be able to rectify any issues,” Fasthosts said.