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Technology
26 February 2025

Seagate Faces Major Fraud Investigation Over Used Drives Sold As New

Chinese miners manipulate hard drives for profit, leading to widespread consumer deception

A significant investigation has emerged surrounding Seagate Technologies, highlighting extensive fraud involving the resale of used hard drives disguised as new products. This scheme, predominantly associated with Chinese cryptocurrency mining operations, has raised serious concerns within the tech community, especially as the demand for storage products continues to grow.

Initially, the focus of the investigation was on specific models, particularly the Seagate Exos series, including drives with capacities of 12TB and 16TB. Yet, reports have confirmed the involvement of other product lines, including the Ironwolf and Ironwolf Pro NAS series. The volume of affected products is staggering, with some estimates indicating millions of drives sold under false pretenses.

According to the details unearthed, the fraud operates through several deceptive practices. Fraudsters erase usage logs, rehabilitating hard drives previously subjected to intensive use, often racking up between 15,000 to 50,000 hours of operational time. They implement counterfeit production date labels, modify serial numbers, and repackage these devices as if they were newly manufactured.

One informant cited by the British online medium Blocks & Files explains, "Clearly used drives are being fraudulently sold as new drives on the open market." This statement underlines the depth of the fraud permeated throughout various markets. Not only are these drives technically used, but they also come with added complications for innocent consumers who purchase them.

Seagate has emphasized the steps they are taking to combat this issue. The company has launched its own internal investigation and expressed concern about the negative consumer impact. The tech firm urged anyone who suspects they may have fallen victim to this scam to reach out via the email [email protected], reinforcing its commitment to resolving the issue.

Various retailers caught up in the scandal include Wortmann, Proshop, and Galaxus. The responses from these companies have varied widely, with some opting to provide refunds or exchanges, whereas others are taking time to evaluate each case individually. This inconsistency has left some consumers understandably frustrated.

To help thwart potential victims, experts recommend several strategies to identify counterfeit hard drives. For starters, prospective buyers should inspect the physical state of the drives, checking for scratches or any signs of excessive wear and tear. The SATA connector is particularly telling; it may show signs of frequent plugging and unplugging.

Another red flag is the production date sticker. If such labels appear incorrectly placed or have signs of manipulation, they could indicate fraud. Consumers should also verify warranty information online, as genuine Seagate products typically include additional months of coverage beyond the standard terms. Fraudulent drives, on the other hand, often feature warranties extending precisely five years from the fraudulent production date.

Tools such as SMART monitoring software—including Smartmontools or SeaTools—can provide insights on the actual usage metrics, exposing if the drive was utilized intensively for cryptocurrency mining tasks, which often put much strain on such devices.

The ramifications of this scandal run deep. Beyond immediate financial losses, consumers who unwittingly acquire these hard disks face significant risks related to data loss. Drives meant for mining are at greater risk of failure due to the unique stresses endured during their previous uses. This situation is particularly perilous for businesses or individuals handling sensitive data, making due diligence before purchases even more necessary.

Beyond immediate consumer concerns, the Seagate scandal has raised questions about the trustworthiness of technology manufacturers as customers become warier about potential ignorance within the supply chain. Seagate's reputation has taken a hit, but the company is active; it has engaged external investigative firms to track down the origin of these counterfeit products and is ready to take necessary legal actions against those found responsible.

It appears the fraud stems not only from individuals or small groups but also includes actions of manufacturers who unknowingly offload defective or previously used products, often from OEMs or cloud providers. Seagate's representative described this gray market issue, confirming their inability to halt dealers from obtaining products outside of authorized channels. Yet, the company continues to work with retailers to track down fraudulent inventory and identify the paths those products have taken.

Despite the challenges posed by this global fraud, there remains hope for consumer protection as Seagate urges vigilance. The tech industry, bolstered by informed customers, can drive improvements within the retail space. Each report submitted to Seagate aids the fight against this complex web of deceit.

The Seagate hard drive scandal highlights the growing necessity for awareness when purchasing technology products, particularly from unofficial sources. Consumers are urged to rigorously verify the seller's reliability, inspect the physical condition of proposed devices, and utilize verification tools to monitor their hardware and confirm its integrity.