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It's not fraud if they are just selling it as a Kindle Paperwhite, with no other details, and they can charge whatever price they like for it. It's only if they are selling it with the advertised features of the newer model that it would be fraud.
They probably aren't even aware that they aren't the latest version of Paperwhite (if they even know there are different versions), and that is thanks to Amazon not giving them specific numbers. It just makes things confusing.
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