Well, I am not aware of anywhere where simply producing a product not fit for use would meet the definition of fraud. Perhaps it does in Oregon, but if not, its a fairly serious allegation and one which if in print, is potentially actionable if the allegation causes loss. Now, I have no idea whether TCE would even contemplate bringing an action against someone on an internet forum who cost them some sales, but its not beyond the realm of possibility. I guess, if I were you, I would be careful which particular words I used when publishing things online. Perhaps I am overly cautious, some might say it comes with my job.
However, wth regard to your comment that they are denying that the pedal is not fit for purpose; I would be surprised if they would accept that. I don't know what was actually said between you and TCE, but if someone were to say to me "you need to accept responsibility that your product is not fit for purpose" I would also not accept that. I would respond that all my R&D and product testing says otherwise. In addition, in order to make that allegation generally about the product, you would need to have sampled a large random sampling. Unless I am mistaken you sampled two from the same dealer and one was "b-stock". Is it possible that the dealer just received a dud batch? I guess I would need to know exactly what TCE were asked to take responsibility for (and on what terms) before knowing whether their response was warranted.
Going back to my earlier point, if TCE as a business decision have decided that CS enquiries are to be handled through their dealers (and their dealers are compensated for that through the dealer agreement), is it really your place to insist the TCE handle it directly? I'd have thought that as a consumer you buy on the terms that the manufacturer has arranged with the retailer. It may be that TCE would rather deal with their dealers who can work out whether its a one off or a systemic issue.
Thats not to take away from the crappy CS you received from "Eric" and the manager who telephoned you. There really is no excuse for that. But, the fact that TCE arn't equipped for CS may be why they use their dealers to deal with retail customers rather than deal directly. I don't know. Personally if its upset you then you should boycott them. I find it hard to understand why others who haven't got direct experience would do the same based on the evidence offered in this thread. That said, each to their own.