I would be very surprised if that's the full story re not getting deposits back. If it is, then agreed, sorry state of affairs but it will depend entirely on what's in the contract and from my (admitteldy vague) recollection of the Standard Conditions of Sale whether or not a deposit is refundable is generally dependent on whose fault non-completion is.

But apart frm anything else, why the hell would anyone exchange contracts on a building that hasn't even been started?! I understand that it's usual to put down a deposit to secure new builds but that is completely different to the formal exchange of contracts at a later stage down the line. The only event that constitutes a potential right to hold on to the deposit is the exchange of contracts. That's when it can get messy and there is a raft of case law on the subject.

Without knowing the facts of each individual case, it is pure speculation that developers are up to no good!