Its really messy, the mods should do something about abuse of Itraders. Not too long it will be a serious issue.
Moderating iTraders can be tricky, but prank ones should be removed. But this seems like a "they can, they did" situation, since people won't leave over it (I am NOT encouraging people to do so) they have no reason to take action.
forum admins and mods do not get involved in personal conflicts between members which includes moderating iTraders. no way for the mods to know whether the itrader was legit or not as both sides can have their version of the stories. you are required to exercise your judgment while dealing with people and take precautions that will save you form negative iTraders. one way to avoid such situation with payment is to get the payment in advance. another thing to look at is to keep your clients happy. i keep all my clients happy, even if it is at my own expense to avoid any conflict. not that that happens often, but occasionally you will get clients that are just difficult to deal with. thats just part of life and the nature of the industry.
and what does that say if he left you a bad itrader and you did the same? It says that when I go to purchase from you and see that I go into his itrader and find that you are far more trustworthy than he is and take your word for it. Don't worry about it.