Thanks for your comments guys. I tried phoning trading standards (I reside in the UK) today but it kept ringing out, I will try in the morning definitely!
When I phoned Waterstones originally about the "dot" on the screen, it was just a rushed guy I spoke to on the till, I am almost certain no note was made of it as it was just a general enquiry. It was when the reader was originally bought late December 2009 that my girlfriend was told that it cannot be returned once opened and faults go through Sony. She paid cash for it, one of the very few times she doesn't use her credit card! I would love to have another lifeline of the credit card insurance but it's not possible here
We don't even have the receipt to take it back to Waterstones now - though Sony took the serial number, date and place of purchase and confirmed when and where it was bought. Perhaps I could use the Sony Estimate as proof of purchase now as they have the dates on.
I am desperately trying to find an alternative to Sony now, and I'm having to sell my trusty camera and guitar to collect funds for a new reader
Thanks again for the replies! I'll let you know how it pans out with trading standards.