Whether you can believe it or not is irrelevant, given that it's happened. I'd be willing to bet that somewhere in the fine print of the agreement there's something that lets them get you for anything they consider "abusive" or along those lines. (And heck, technically, they're not really stopping you from driving that rental unlimited miles, just stopping you from renting in the future, so they're not violating anything anyways. There's no legal requirement that they have to rent to you.)