Hard Disk Fraud: Rising Evidence of Chinese Origins
Recently, a troubling trend has emerged in which numerous online retailers have been distributing Seagate hard drives advertised as new, despite evidence indicating they have been used for extensive periods. Unscrupulous individuals appear to have reset the SMART (Self-Monitoring, Analysis, and Reporting Technology) data of these pre-owned drives, reintroducing them into the market through undisclosed channels. This situation has also impacted authorized Seagate dealers. However, it’s worth noting that Seagate’s server hard drives track their operational statistics in a separate log known as the FARM (Field Accessible Reliability Metrics). This data currently remains untouched by the fraudsters, allowing for detection through tools like smartmontools or Seagate’s own Seatools. Reports suggest that these compromised drives have logged an average usage of approximately 25,000 hours.
Global Impact on Customers
The issue extends beyond Germany, with consumers from various countries including Switzerland, Austria, Luxembourg, the UK, the Czech Republic, and the USA reporting similar experiences. Additionally, the Hong Kong-based online retailer East Digital has been implicated in distributing these faulty drives, although they have since sold out. Reports have surfaced from Australian customers of East Digital who are also facing the same problems with high FARM runtimes. Furthermore, there are indications that this fraudulent activity is being recognized in Japan as well. We encourage anyone with further information to reach out via email—those wishing to remain anonymous can do so through our secure mailbox.
Origins of the Drives: Chia Farms?
The origins of these used hard drives remain uncertain, but there are claims that a significant number are being offered for sale in China. It is speculated that many of these drives may have originated from defunct cryptocurrency Chia farming operations, which are becoming less viable due to rising energy costs surpassing potential profits. Initially, the Chia network’s available storage capacity was merely a few exabytes, but it surged significantly. However, since mid-2024, the network’s storage has seen a decline from approximately 34 exabytes to around 19 exabytes today. This reduction of around 15 exabytes is roughly equivalent to the disposal of one million hard drives with a capacity of 16 TB each. Although not all of these drives will be from Seagate, the company still commands over 40 percent of the hard drive market. This suggests that more than 400,000 used Seagate drives could have been discarded from these Chia farms. A forum user reported that Seagate informed them their drive was originally sold to a Mongolian company in China. Meanwhile, Seagate’s representatives in Germany have been reticent about the drives’ origins, citing data protection laws and asserting that the company is not complicit in the fraud.
Short Warranty Periods Raise Concerns
While some of the drives may still carry limited warranties, many have already surpassed their coverage periods. A significant number of these drives were sold as part of larger systems, classified as OEM (Original Equipment Manufacturer) drives, which typically lack any warranty from the manufacturer. For instance, if a drive was sold within a Dell system, Dell would handle any warranty claims, effectively removing Seagate’s responsibility. Prior to these fraud cases coming to light, many consumers had already voiced their frustrations about dealers selling OEM drives devoid of manufacturer warranties. It is advisable for buyers to check the warranty status of their drives immediately upon receipt, ensuring they are aware of the situation (for brands like Seagate, Toshiba, and Western Digital). The serial number is often included on the invoice and can also be retrieved from the anti-static packaging prior to opening, allowing buyers to ascertain the production date. If the date indicates several years have passed, it is prudent to exercise caution and consider returning the product.
