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2010-03-08T21:43:30Z
Yesterday, we brought you news that a batch of Core i7 processors that shipped out of NewEgg had been complete fakes. The boxes in question looked real enough from the outside, but opening the cardboard revealed "fans" that were actually stickers and processors made of aluminum. and a bit of paint. At the time we identified D&H Distributing as the company responsible for shipping the "demo units" to Newegg in the first place.

We've just heard from Newegg regarding this problem; we're passing along their statement:
"Newegg is currently conducting a thorough investigation surrounding recent shipments of questionable Intel Core i7-920 CPUs purchased from Newegg.com.Initial information we received from our supplier, IPEX, stated that they had mistakenly shipped us "demo units." We have since come to discover the CPUs were counterfeit and are terminating our relationship with this supplier. Contrary to any speculation, D&H Distributing is not the vendor that supplied us with the Intel Core i7-920 CPUs in question.

Newegg’s top priority is to proactively reach out to all customers who may have been affected to ensure their absolute satisfaction. We have already sent out a number of replacement units and are doing everything in our power to resolve the matter promptly and with the least amount of inconvenience to our customers.

We have always taken pride in providing an exceptional experience for each customer, and we apologize for any inconvenience to our valued customers. We take matters like this extremely seriously, and are working in close cooperation with Intel and the appropriate law enforcement authorities to thoroughly investigate this incident."


We'd like to apologize to D&H Distribution for mistakenly identifying them as the source of the problem. With that said, we'd also like to point out that D&H Distribution could not have possibly dealt with the issue in a worse fashion. We don't know where the rumor that D&H Distribution was involved originated, but the smart thing to do would have been to contact the sites involved, explain the facts, and ask that they consider not laying the problem at D&H's doorstep until an investigation could be completed.

Instead, D&H sent out its lawyers, with utterly predictable results. News flash guys: Waving around a bunch of C&D letters doesn't make you seem tough, it makes you look like a company with something to hide.
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Inspector
2010-03-08T22:14:48Z

I don't get it if D&H didn't ship out those FAKE units why would they go and send out C&D letters -.-. they are just stupid for doing that. But nice to see it cleared up and hope no one left newegg because of this... lol

rapid1
2010-03-08T22:33:35Z

As far as Newegg goes it would take far more than this to send me away from them. I have never had any issues and any I have had with equipment I got from them no matter how far out within reason it happened, they responded with new pieces or equipment replacements.

I have had as will anyone who has used a single retailer regularly (I have used Newegg regularly for almost 10 years), will have one now and again. This is most often not the distributors fault especially one with a track record like the egg has.

As for D&H who knows what they were thinking. I imagine in online retail especially of computer hardware or electronics in any way in the last couple of years, that a smaller distributor would reply in this way. Many don't understand that the EGG is big time now, and at least on the consumer level as well as many other, I would imagine is one of it not the largest singular distribution points in the US for this type of merchandise online.

Xylem
2010-03-08T23:20:07Z

IMO D&H has a real bunch of idiots as Legal advisers, who just jump to conclusions before getting to the bottom of anything.

This should be a lesson for other fellow distributors, not to jump into conclusions.

On the contrary, I still feel something is really fishy in this entire episode. D&H may be trying to cover up something here.. [:O] Oh and BTW D&H are also Certified M$ distributors as well? Think that should be any clue...

Joel H
2010-03-09T00:13:43Z

Uh, no. Do you have any idea how many companies are certified MS distributors? Good gosh. Yes, there's something fishy in the episode, but why would Newegg take the heat off one partner and drop it on another?

Tinfoil-hat-wearer is wearing tinfoil hat.

ClemSnide
2010-03-09T02:37:34Z

I misunderstood something in the initial story-- I thought that the processors were actual knockoffs that worked (after a fashin) rather than being aluminum mockups. So I guess it didn't take a genius to dwtwct the forgery. Sorry, Dreadrok, but I must ask you to turn in your Dick Tracy Junior Detective badge.

I agree completely that D&H Distributors screwed the pooch big time. You're innocent... and you still send out angry letters from lawyers? Try calling 1-800-LEGAL-10 next time, you'll get better advice!

Anything out of this new company, Ipex, as of yet?

animatortom
2010-03-09T04:43:30Z

That's our society of lawyers for ya'! Cover your bum with lawyers, even before you know if you are involved or not!

If we started suing the lawyers instead, then they wouldn't be able to gain the money they need to be politicians! Then they would know what it means to have a real job and have to develop a little thing called ingenuity.

gibbersome
2010-03-09T07:10:20Z

"but opening the cardboard revealed "fans" that were actually stickers and processors made of aluminum. and a bit of paint."

@ClemSnide I was confused about the same thing. They seriously didn't expect to get away with this, right? Kudos to Newegg for dealing with the issue quickly and professionally.

realneil
2010-03-09T09:46:03Z

Newegg has acted as they should in this matter. But it would only take someone who sells much cheaper than them to get me to switch vendors. (anyone out there that wants complete loyalty should buy a Dog)

They DO have 'eggcellent' customer service and they ship faster than their competition does. I use them more than any other vendor. But,.....if I had a Micro Center nearby, that might change.

Zestia
2010-03-09T10:13:23Z

I’m going to play devil’s advocate here for a bit and see if I can make a case in defense of D&H Distributors. I don’t know anything about them but it appears at this point that they were wrongly identified as the guilty party. We may find out otherwise at some point in the future but according to the facts at present someone singled them out for something they didn’t do. Now, if you or I own a business and somehow this business is misidentified as the party responsible for allowing fraud to be committed against the consumer, we are going to do everything we can to clear that up. And we are going to do it in the swiftest manner possible. And if these false accusations are being made on the Internet, we are going to do it faster still because on the Internet rumors [censored]ll at broadband speed and damage is permanent. How you minimize that damage is often a function of how quickly you react. How quickly you react can be the difference between how much business you continue to do and not doing any business at all. So yes, I can see where we feel that D&H came on strong with their cease and desist letters but if your reputation and your ability to do business is being threatened are you going to [censored]foot around the issue or leave anything to chance? Are you going to politely ask those who are misinforming the public to consider that they have the wrong story and hope that while they consider it no more damage is done and that no one else will promote the same false information? No, you don’t have time for half measures and you’re certainly not going to risk it. You are in survival mode and you need to communicate how serious you are about this because your livelihood may depend on it.

I’m not saying that HardOCP and Icontric were wrong here. In fact, it’s reporting like theirs that creates the pressures that allow truths to prevail. I imagine D&H brought considerable pressure on NewEgg to make sure they got to the bottom of this and then reported their findings. I’m simply saying that D&H had to get out in front of this and defend themselves. We all seem to be angry at them for doing so but what would you or I have done?

ClemSnide
2010-03-09T10:52:30Z

@animatortom: Agree in principle, but let's not forget that it was a lawyer (and a Philadelphia lawyer, no less) who established freedom of the press for us in the early years of our nation's history. (It's a greeat story-- come to Philly this summer and I'll tell it to you.)

realneil
2010-03-09T11:22:55Z

ClemSnide wrote:

come to Philly this summer and I'll tell it to you

That probably would be a gas! My wife was there for a educational seminar last year and still hasn't shut up about the architecture and the 'Steeped In History' feeling one gets while walking about while there. Maybe we'll get a chance to go there and hear you speak.

 

@Zestia:  I agree about a company wanting to stop any internet rumors about themselves as fast as possible because word does travel fast and the wrong word can  break a smaller company's reputation post haste. I would have turned my lawyers on everybody too.

When I first heard of this, I had a bad feeling about ever doing business with D&H Distributing. (they probably don't even sell retail) But my perception of Newegg didn't change at all because I know without a doubt that they'll make it right. Not knowing D&H on a 'personal dealings' basis, I was ready to just write them off.

Joel H
2010-03-09T12:02:40Z

Zestia,

I think there's a sociological perception problem sitting squarely in the middle of your logic. What you've said--your argument--rests entirely on a single assumption.

"Only innocent companies react so aggressively and quickly to squelch rumors about themselves."

D&H screws up in multiple ways here. Specifically:

#1. It claims that the website is spreading "false and malicious" statements. This is legalspeak that's meant to imply D&H might have a libel claim (it doesn't). In order for libel to be proven in the US, it must be demonstrated that the publisher caused actual harm to the plaintiff *and* knew the material was false. This is "spooky language."

#2. It alleges that an Internet story has caused "Grave and irreparable" damage to a client. Again, more spooky language, but it ends up making the law firm look like idiots. Grave and irreparable damage? *Really?*

#3. The letter demands that the site in question cease publishing defamatory articles (again, this attempts to invoke scary libel law even though libel isn't applicable), remove all reference to D&H, and "post an immediate retraction and apology which shall remain posted for not less than thirty days.")

It's this demanded apology and time limit that, I think, really sticks in people's craw. Again, it's a matter of perception, but companies that react this aggressively are typically companies with something to hide.

I think there's a relationship between the perceived level of arrogance the company's lawyers are spouting and the guilt level of the company. In this case,

rapid1
2010-03-09T13:01:31Z

Well the only thing I would leave the egg for is because they basically let me down personally or someone I knew. The reason I say this is because I have dealt with many vendors with all the PC's I have built for myself and others.

If I ever had an issue I go back to my distributor for a replacement return or whatever. The only one I have used which is both fast and generally no hassle to do this through has been the Egg. The first MB I bought from them went out after 4 months. I contacted them they told me mail it and call back with the confirmation numbers from my chosen mailer (the po in this case), which I did.

I had my replacement MB in 2 days following, and I live on the opposite side of the country from any of there locations at the time. I have also had issues with other distro's and it has taken me a month to get a replacement at the most, usually about 2 weeks though. Or I can go with the egg it takes a phone call confirmation numbers and 2-3 days.

Because of this I have even used the Egg even if there specific part was a few dollars more. Knowing a company will back you up and take care of you is definitely worth a good bit in my book.

realneil
2010-03-09T14:00:44Z

Yes,.....better service is worth spending more money for. It's something that I've learned over time, with experience.