Yes... they "could"... but that was just in the beginning... now every Embassy/Consulate play their own game with their own rules. Actually there is a consent about the three-month-rule now almost everywhere... for any kind of visa.
Also not entirely correct what your agent told you... they don't always give a tourist visa instead. Normally they do that if the duration of the booked "soft power" isn't sufficient. Anyhow... you can't blame the gym without valid reason and the gym can't give a refund without valid proof. Not really a happy ending but that's what it is... sadly...
Btw... no need to get loud... there is a big difference between "rejected" and "cancelled", that's why it was important to clear that.
That's not entirely true... there are many reports where the embassy gave a reason. And of course... the gym needs a prove that your application was rejected because of their papers, otherwise many people would ask for a refund without valid reason. Again... was the applicattion "rejected" or "cancelled"?
First of all... you don't apply "through" a gym, they are not an agency, are they? About the "refund policy"... I'm pretty sure that this policy states that this gym will give you a refund if your application is rejected because of the paperwork they gave to you, right? So... are you sure that this documents were the reason for the rejection? Was the application really "rejected" or maybe just "cancelled"?
If you search the group you'll find a lot of posts where people had to come in for an interview. Also you can find posts where the DTV was not accepted when people tried to re-enter to activate it. About the residency... I meant the address where you stay in the country where you apply... "officially". If you fake it while still staying in Thailand you're actually cheating, no? And some Embassies will ask anyway for copies of your entry stamp in their country... so... no chance. Best ist to play fair and clean...