I would agree with that.
Anyone host offering 500gb disk or bandwidth for $1-$5 dollars a month is defiantly not one you would want. Try even using anywhere near that and you would be suspended. Overselling would be done to the max with more users per server then what's recommended. Then when the server crashes and they can't repair it they run off with the money
Before purchasing from a webhost I suggest you ask some good
pre-sales questions first and stay very, very far away from hosts like the ones I explained above.
Cheers,
Matt