An Illawarra MP has requested an "urgent investigation" into the organisation of the failed Festival of Foam and Light.
The event was promoted as taking place on Monday at Bulli Showground, with organisers claiming it would attract thousands. However, the festival didn't eventuate.
The Mercury has made several unsuccessful attempts to contact the organiser, Jagat A Deniau - who also goes by the name Riya Deniau.
The collapse has left dozens of small business owners out of pocket after they paid stall fees of varying amounts to be part of the event.
Most say they are yet to receive refunds, however Ms Deniau has told them they will be forthcoming.
Meanwhile, Shadow Minister for the Illawarra and South Coast Ryan Park has written to the NSW Fair Trading Commissioner to seek an "urgent investigation" into the event and its organiser.
"I don't want to see another community hoodwinked like this," he said.
"This is not what we want to see here in the Illawarra given we have become a really significant market for major events and festivals across Australia.
"While that is great for our local economy, organisers must do the right thing by local suppliers and businesses who they rely on to make their event a success."
He said it was important the Fair Trading Commissioner investigate, and assist in getting the money back to local small business owners who have been "dudded" by the behaviour of the festival organiser.
Some stallholders were sent an email from Ms Deniau little more than a week ago, advising them that "due to unforeseen circumstances I have had to withdraw the event".
A spokesperson from NSW Fair Trading said their advice to customers including suppliers and vendors to the event who are dissatisfied in their dealings with the festival is to contact the trader and try to resolve the matter in the first instance.
"Customers who are unable to resolve their issues with the trader are advised to lodge a written complaint at www.fairtrading.nsw.gov.au," the spokesperson said.
"Where customers have paid by credit or debit card, they should contact their credit provider and make inquiries about applying for a credit card chargeback. A time limit for chargebacks may apply."
Ms Deniau had claimed the event would be "like two festivals in one", filled with foam pits, an inflatable obstacle course, rides, food trucks, live music and light shows.