That is a giant heap of bullshit. The "we have secret orders that you must obey" bit is incredible. How could privacy possibly be a legitimate excuse?
If I were in your shoes, I'd be looking for better hosting. A company that doesn't understand that service businesses require good service rarely restricts that cluelessness to just one facet of the company.
If I were in your shoes, I'd be looking for better hosting. A company that doesn't understand that service businesses require good service rarely restricts that cluelessness to just one facet of the company.