If you actively try to avoid certain types of clients you can reduce the number of abusive clients trying to buy your services.
Warez, hacking, porn and other questionable activity will of course attract more abusive clients as you build your reputation on that. For example, if you have a high number of questionable sites hosted, you are unlikely to get quality customers that not only use fewer resources, but also have virtually no chance of getting DDOS or having special requirements.
If you do host questionable sites that you NEED to charge more. The ones who want it cheap and dirty will be the most troublesome whereas those willing to pay understand that the cost of hosting them is actually higher than hosting some little blogger.
Paypal has not been too bad for us. They have suspended our accounts and cost us thousands of dollars of charge backs over the years but ultimately it is still the best payment processing option out there in the eyes of the consumer. Merchants may begin to loathe it but the number of buyers means you cannot cut them out. Legit buyers won't bother signing up with some other payment gateway just to get some hosting.
If you do do away with Paypal and stick with payment gateways preferred by the 'questionable', and you still maintain low prices, you will never be able to avoid the abusive clients. Well.. not without extensive client screening.
As for dealing with negative reviews, just confront them in the thread and explain your situation. If you feel it is not your fault, just be grown up about it and share your own views. Typically it is the one that sounds like a 12 yr old that ends up looking bad so don't engage in petty squabbles. And even if what they complain about is true, you can still be open an honest about the situation and apologize for any short comings. No one is perfect. Even the biggest and best make mistakes. This is how we grow and learn. The best way to get out of hot water when something is your fault is to take responsibility and explain how you have or will deal with it to prevent such a fault occurring again.
Just my 2c.
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Added after 2 minutes:
Trust me don't use paypal... Whenever you are able to go through the verification process of 2CheckOut its worth it at the end!
2CO is okay. They work well enough but they are very expensive and have virtually non existent support.
Paypal is more competitively priced and their support (in HK) is better.
In my opinion, both companies have grown to such a size that neither care about losing a few customers or having a few negative things said about them.
Unfortunately there aren't many other gateways around these days. At least outside of the US.
