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Since they won't honor their warranty or refund your money voluntarily, you want to raise the stakes on them. Send them a certified, return receipt requested letter detailing the history, including their failure to honor their warranty, their misrepresentations about the set, and the defective nature of the set, and demand they refund your money in full. Inform them that if they do not comply with your demand within a short specified period of time, you will have no choice but to file a suit for your damages and file a formal complaint with the attorney general's office. BUT, be sure to specifically mention that you will be filing this suit not only as a breach of contract case, but also as deceptive trade practice and fraud causes of action, which will entitle you not only to your damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit and your formal complaint. Even if you have to file the suit and the complaint, that's likely all you will need do. In my experience, they will settle this without a hearing rather than risk punitive damages, the judgments being on the record, and the complaint.
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