I had one of these a couple of years ago and, foolishly, thought I could organise them and get them into shape.
After 3-4 rehaearsals of listening to one guitarist play ludicrously loud, the other constantly being ou of tune and a drummer who lost time every time he through a 'fill' into the basic rhythm I finally gave up and walked away.
All three of them had been in bands before, were reasonably mature (late 30's / early 40's) and all hopelessly deluded.
If you get a good feel at an audition then musical ability isn't always the most important thing. A good Attitude and mutual respect, along with some basic organisation can go a long way. Doesn't sound like this lot had any of these
Also, charging for an audition is complete no go. I've genuinely never heard of this before!