Before opting for such web hosting service, the very first thing you need to realize is that the factor which is driving overselling is the severe market competition. In fact, overselling is a reaction of this cutthroat competition and has nothing to do with the customers need. Thereby, there is no financial justification for overselling.
Most of the oversold web hosting companies provide no commitment in terms of intellectual property, finances and human assets. As a result, any web hosting company can provide such services. In addition, you also need to realize that overselling does not provide a true competitive edge. It is simply a price war between two competitive companies that force the other to oversell their services, so that they can remain in the competition.