It is true.
Its done to make them look more attractive to potential customers. If you knew nothing about overselling and saw two packages for the same price, but one offered 1GB and the other offered 1000GB, which would you go for?
Most overselling hosts have a definition in their terms and conditions that limits you from uploading certain files, i.e mp3s, videos and backups are disallowed.
"Unlimited" space hard drives do not exist... So nobody can really offer you unlimited space for £5 per month..
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