Selling defective goods without letting people know that they are defective is not permissible because it is a form of cheating about which the Messenger of Allah (peace be upon him) said:
He who cheats us is not of us (is not my follower).
It is also authentically reported that the Prophet (peace be upon him) said:
Both parties in a business transaction have the right to annul it as long as they have not separated; and if they speak the truth and make everything clear they will be blessed in their transaction; but if they tell a lie and conceal anything, the blessing of their transaction will be wiped out.
Those who cheated and sold something that was defective for the price of a sound one should repent to Allah (may He be Praised and Glorified), regret what they have done, not return to that action, to ask for forgiveness from the one whom he cheated and make an agreement with him to return the rest of the money.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.