They made a bad investment due to lack of due diligence on their part. You make a bad investment you should carry the can. If they had looked into PTC's record, their relationship with the ASA or even took a cursory look on here they would now be in a much better position.
I agree in principle, but on the other hand I think that a prospective student completely new to aviation could be forgiven for thinking some of these companies aren't as shoddy as they really are. The integrated brochures, websites etc. are all slick, well put together, and not entirely dissimilar to what you might expect from a top university.
Nobody warns A-level students to investigate their first choice universities to make sure there are no rumours of them going bust, nor is there any danger of it happening. If the first experience of aviation for a wannabe pilot and their parents is the open day of an organisation like Cabair or PTC, then I don't think they'll have any reason to feel suspicious. Lots of big, neatly furnished buildings, people in smart suits and more than likely at least one video involving someone in a pilot uniform walking across an apron in slow motion.
The impression of a big company, shiny expensive equipment and let's not forget that Boeing report/prophecy of enormous forecast pilot requirements. I know that my family and I were sold on the whole thing and didn't once feel any reason to question the financial affairs of the FTO. I could see why a member of the public wouldn't hand £80,000 over to the local flying club, but these integrated schools do a damn good job of making themselves look too professional and large to disappear overnight when you've no previous experience of the aviation industry. Suppose the applicant does do some research and reads bout the school on PPRuNe, who's going to trust anonymous forum contributions against the word of the real people they met at the open day? I suspect people didn't research PTC further because they felt they had all the information they needed from the open days and their website.
The real blame I suppose is the lack of transparency about these companies and the fact that aviation is just so insular. You can read on here about the mad and bad things happening in aviation- pilots paying to work, people losing thousands to dodgy schools, etc and yet how often does this stuff make an appearance in the mainstream media? The general public don't hear much at all from aviation apart from big airline profit announcements, whilst every time a banker sneezes we're all calling for resignations and payouts. I personally can't blame the wannabe who wakes up one day and decides to be a pilot for having the public perception that aviation is booming and all pilots everywhere are loaded, and thus flying schools are a safe bet as well.
My sympathies go out to those students who might be reading this having been failed by PTC, as someone who very nearly ended up taking the same risk. I can't accuse anyone of a lack of 'due diligence' when the schools are so good at making their target market think that diligence is not due in the first place.
ADC