If you care to you might want to check out the feeding frenzy on a popular auction site for 16GB and 8GB USB Pen Drives.  These items are being auctioned off for 29.95 - 71.99 each.

Herein lies the problem.  Considering even the NAND Chip for the device coming from the lowest rated producer of said chip the cost for the chip(s) including the I/O controller chip for a device like this would cost no less than 4.99 per GB thats for the chip(s) alone not including the controller chip.  So based on this the price for an 8GB drive would be at cost no less than $39.92 and $79.84 for a 16GB so how then are they selling for 29.99 - 71.99.

This is how.  The NAND chips are being compressed and when you plug the device into your USB port a small onboard file is telling your O/S that the device is much larger.  This file is usually a malware based trojan.  So also knowing this what else is it affecting on your computer besides tricking your O/S????  It could be anything. 

A very quick test for any device like this is to try downloading more than 2GB on a 8GB drive and More than 4GB on a 16GB drive.  If the process to write to the device takes longer than 15 minutes on a 32 bit machine or longer than 7 minutes on a 64 bit machine you have a compressed pen drive.  Because when you go back to access the file it will come up as a read error.  Even if you were to download one file smaller these types of chips because they have been altered may from the point of conclusion read/write lock themselves rendering them worthless.  Also forget about a manufacturers warranty there isn't one.

In short beware of the no name brand auctions with no warranties and read the fine print when doing any kind of transaction the SCAMMERS are having a field day this season selling IT products for far less than cheap.

Caveat Emptor,

Ranger

Replying to [Ranger]:
I thank you for sharing your knowledge in layman's terms. If we all share the secrets of our trades to protect each other, Alibaba will slowly rid itself of the scam artists . Knowledge is power thank you again for sharing!!

Replying to [Ranger]:Thanks, i am one day smarter then yesturday and will watch out for this

Replying to [Ranger]:
Ranger,

thanks very much for passing on this information. It just shows how deep the scams in our society really are. I would never have imagined something like this was going on, but obviously somebody clever has managed to come up with an idea like this.
Did you do anything else besides posting the alert here?

RealDeals

Replying to [Ranger]:Thanks for infomation, Ranger. I am just a USB seller. According to the chip price at present, $30 for 8GB is quite possible. real memory samsung flash

Replying to [Ranger]: DUDE WHAT ARE YOU THINKING!! YOU KNOW WHEN YOU SEND THE CHINESE 2000US YOU ARE SENDING THEM THE EQUIVALENT OF 14,500 RMB THAT IS ENOUGH FOR 14,500 KGS OF RICE!!! WHEN YOU SEND THEM MORE LIKE 7000US THAT's 51,000 RMB ALMOST ENOUGH TO RETIRE ON!!!