Sounds like the MO of an unethical scammer. The best defense is a good offense.

IANAL. Go see one if things get nasty.
Like any scammer, he likely knows the ins and outs of what he can *legally* get away with ... most likely because they have sepnt some time in a courtroom listening to lawyers tell them. You doing anything illegal to get back at him will just make you a criminal and lend them fodder for winning a battle of your word against theirs in a potential future court battle. The shipping to you happened ... they provided it so you have to pay for it becasue taht service was delivered. The cost of shipping it back falling on you is just the sort of thing the scammer is counting on providing enough inertia for you to just accept the shoddy merchindise.

Ship it back, pay for the shipping, expect a refund of the cost of the unit. If you don't, take them to smal claims court. Unfortunately, you will have to eat the two shipping costs ... take your pound of flesh by writing an honest review of their selling tactics to warn off potential future victims.

Another thing you can do is take down the serial number and MAC address just in case someone reports it as stolen on these forums as has happened in the past.