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1  Alternate cryptocurrencies / Mining (Altcoins) / Contacting Authorities regarding KnCMiner Titan Neptune on: September 13, 2014, 08:09:37 PM
Updates marked as orange.

This thread collects information on relevant authorities and their replies about KnCMiner's business practices. I will do my best to update this post as we get more responses from the authorities. The idea is to avoid double work for the agencies/authorities and us.

There is an option to organize a class action suit. See my other thread if you are interested.

Contacted authorities and websites petition
Please participate, it can only help! It has now been passed on to the swedish consumer

Konsumentverket - swedish consumer agency
They had no interest dealing with me and were extremely unhelpful. They only help swedish residents.
If you are a swedish resident, can you please contact them?
You can find your local bureau here.

*Swedish legal aid
If I understand correctly you can still apply for it as a foreigner! Please read the page whether you fulfill certain requirements, particularly if your financial base is less than ~36000$ per year.

*Your Europe - National Contacts
A great resource to find centres for consumer advice (ECC-Net), ombudsman and alternative dispute resolution mechanisms for your EU country of residence.

European Consumer Centre Network (ECC)
I have contacted the ECC for the UK, and for Services. They said that bitcoin mining may be classed as a business activity and I may be considered a business. However, it is unclear how a judge would see this. They promised to contact the swedish consumer centre for advise. They have referred me to the EEN (see below) for advise as a business.

Enterprise Europe Network
I have contacted the EEN in the UK and asked about consumer vs. business, false advertising and fire hazard. They were very polite and helpful on the phone and promised to look into these matters after an email with all details.

The Swedish Bar Association
I have been looking for a lawyer here. I have contacted several lawyers, but have not got a reply back yet. One commercial lawyer replied, but I believe following the "consumer" route is more promising at this point. He also wanted a substantial retainer payment right away.
Do you know a good swedish lawyer?

*The National Board for Consumer Disputes
"Our main task is to impartially try disputes between consumers and business operators. [...] The Board's recommendations are not binding, but the majority of companies follow them. [...] It usually takes about six months from the claim to a decision"
NOTE: They do NOT provide advice for individual cases.
TODO: contact them to start the process.

*ANEC - Consumer Voice in Standardisaton
I reported the safety issues to them. They were interested on the phone and I have submitted a detailed letter to them explaining the fire hazard. I'd expect that they refer me to yet another organisation. Let's see.
If you have personal experience with the fire hazard or have information to add to my write up below, please contact me or the ANEC!

Further action
Contacting their VC investors may be interesting.
Which authorities in Sweden investigate fraud?

*Direct Selling Association UK
Only handles disputes between consumers and their members. KnCMiner is obviously not a member.

*Other Ideas
Consumer Portal of the EC - there's lots to read and more information.
European e-Justice portal - gives information for mediation services. May be interesting, I need to follow up on that.
Citizens Advice Bureau UK are usually only dealing with consumer issues within the UK. However, they may be able to advise whether bitcoin mining is a business activity in the UK. If I'm not a business, then the local legal system may be relevant and I can get a claim in a UK court.

Points where KnC may break the law

1) KnCMiner sells potentially dangerous products.
1.1) Fire hazard
KnCMiner's Neptune draws 300-400W per cube through 1xPCI-e 8pin connector, which is spec'ed at 150W Wiki. This poses a fire hazard and there are reports of melting cables and fires operating the KnCMiner Neptune [1]
TODO: What are the relevant authorities, if at all?
1.2) KnCMiner does not CE (or FCC) certify its products
Background and authorities: CE advisor, EU, Consumer Lobby].
It is unclear whether the CE marking is required for KnC, as their products operate at 12V DC and do not come with a PSU. The regulations on Low Voltage Electrical Equipment apply only to devices operating at 75V-1500V. KnC apparently doesn't ship a PSU to avoid the CE marking. The regulators may see this differently, as it is a deliberate attempt to side step regulation and as there is a high risk of fire.
TODO: contact authorities (e.g. Consumer Lobby) and find out whether there is a breach of regulations.

2) KnCMiner sells to consumers but avoids consumer rights
2.1) I have paid VAT. I did not and do not run a business. My contract of employment does not allow me to run a business.
2.3) KnCMiner has made no effort to require business information and to sell to businesses only.
2.4) KnCMiner's business depends on selling a (large? how large?) percentage to consumers.
2.5) KnCMiner did not advertise on the order page that it is a "business only" sale. I did not expect to waive all my rights as a consumer and the protection I get as a layman in court. Apparently I am now expected to deal with the full complexity of contract law as a layman.
2.6) In conclusion, KnC's T&C state "for business use only" so that they can avoid consumer rights.

This document has more details on the definition of a consumer (ty mwizard). The uncertainty remains, as bitcoin mining may be considered a "production" and hence a business activity. The most interesting bits:
Accordingly, a consumer is a natural person, who is acting outside the scope of an economic activity (trade, business, craft, liberal profession).
[...] some countries treat them (mixed transactions) as consumer contracts if the personal purpose prevails (Germany, Nordic countries)
In the UK, companies may rely on consumer protection against unfair terms if they purchase goods of a type they do not ordinarily deal with.

3) False advertising to increase sales
This could be a case of fraud and business misconduct, as KnCMiner made false representations to increase sales.
3.1) Delivery date
3.1.1) KnCMiner advertised on the order page that the Titan "will be shipping in Q2/Q3 of 2014" and "Shipment begins in Q2/Q3 of 2014". I consider the first statement to be binding.
3.1.2) A delivery date in Q2 2014 seems entirely impossible. The purpose was to increase sales. TODO: can an expert on ASIC development confirm the timeline for a 28nm device from RTL, tape-out to delivery?
3.1.3) The T&C 8.1 mention "The delivery date is provided for information purposes only and shall not be binding on KnCMiner". This is markedly different to their advertising on the website.
3.2) Specifications
3.2.1) KnCMiner confirmed 300MH/s for around 800W of power.
3.2.2) KnCMiner's Titan uses 1100W according to their public news or 1160W according to their forum post, 37.5% - 45% more than was confirmed and advertised.

4) KnCMiner acts in full conflict to the interest of their customers
This point is somewhat speculative. This may again be a case of fraud and business misconduct at least according to UK legislation, as they have failed to disclose relevant information.
4.1) In principle, new mining devices are valuable because they are rare.
4.2) Selling Batch 2 shortly after Batch 1 for effectively 50% of the price is damaging the interests of their Batch 1 customers.
4.3) They did not disclose their intent for a Batch 2 at the time of Batch 1 pre-order, although it was material for the decision to order or not. Most customers would not have ordered if they had known the intent and pricing for Batch 2.
2  Bitcoin / Hardware / Class action against on: September 13, 2014, 08:01:04 PM
Have you ordered a KnCMiner Titan or Neptune?
Are you fed up with them and are interested in legal action and possibly a class action?

I'm trying to judge whether a class action suit would be a possible. Can you please state what you had ordered and why you would sue them?

Do you know a good lawyer or are a resident in Sweden? It would be helpful to have a contact there.

For example, I ordered a KnCMiner Titan. I am a consumer and would like to get a refund, because their products are unsafe (fire hazard, no CE marking), they have made false representations (Q2/Q3 delivery, 800Watt), and because they act in direct conflict with their customers (Batch 1 vs Batch 2).

My other thread collects information on replies from authorities and lawyers. Please contribute if you can!
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