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A Lyttelton family says it is out of pocket after paying a deposit to kitset company Get Design and Sales.
Matthew Wood decided to build a sleep-out to provide some space for his family which includes four teenagers.
They found a design which matched their house with Get Design and Sales before the warning which Consumer NZ circulated about the company not following through with providing materials.
Consumer NZ warned people last week not to deal with the company which operates websites mydiy.co.nz, kiwi-built.co.nz and econobach.co.nz
The couple first realised something was off when they paid the deposit of $3400 and didn't hear anything from company director Emma Gestro for a few days.
Giving Ms Gestro the benefit of the doubt, they found a builder to work on the site who said he wanted the plans for the building. After a few emails were exchanged, Ms Gestro provided them with plans, but not for the building they wanted.
Ms Gestro did send foundation plans so Mr Wood had the contractor go ahead and lay the foundation despite having a "gut feeling" things weren't going as they should.
With work already taking place, Mr Wood began demanding answers and was shocked to hear Ms Gestro say she would put in the order for materials "soon."
"I told her 'what do you mean you'll put our order in soon, you should have done this weeks and weeks ago,'" Mr Wood said.
Mr Wood told Ms Gestro the deal was off and he wanted the deposit back, which she agreed to do.
Mr Wood told Ms Gestro that if the money wasn't coming, he would launch legal action.
Ms Gestro told the Herald the company was in the process of sourcing private funding to reimburse buyers.
"The situation has arisen due to some bad publicity on Facebook mid-last year which started with a small trickle of cancelled orders," she said.
"Refunding clients had a huge impact on cash flow.
We initially thought we could trade our way out of this situation and that was the intention.
"After some finance was sourced, and with the expectation of the normal increase in demand in the New Year we felt confident that this situation could be reversed quickly and with little impact to clients."
"In the event, more bad publicity resulted in a complete drop-off in sales which has brought us to this point."
Ms Gestro said she would like to "sincerely apologise" for inconveniences and stress the clients suffered during the process.
"We will continue down the track outlined above and all clients are being contacted with regards to their specific situations."
Ms Gestro contacted Mr Wood on Tuesday and said the money would be in his account the following day.
On Wednesday evening, Mr Wood was again contacted by Ms Gestro who said she would no longer be paying him ahead of others due to his contact with the media.
Mr Wood is now planning legal action.