I too have had various levels of success with Red Arrow Hobbies. A couple of orders went fine, and my last one a couple of years ago (which will always be the last one since I'll never order from them no matter what) went similar to what started this thread. I posted about it here and several people agreed that they weren't great but several spoke up and said that if you call Dave on the phone that's all it takes and he'll take care of you.
Apparently that is no longer the case. Calling RAH gets you nothing anymore.
Any vendor that accepts payment without having product to ship is a crook, even if they're not actually breaking laws, in my opinion. In today's online business world your stock needs to be reflected on your web page and if you don't have something then the customer should be aware. At the VERY least the customer should be contacted and told which portion of their order would be shipped later, ship the in stock portion now, only charge for the product that you ship, and ship the rest of it later on your own dime. If that's too much, you should cancel the whole order.
Treating customers like crap for so long is just a horrible way to run a business. It doesn't surprise me at all that RAH is on the brink of going under.