selling refurbished phone as new

My son needed a new phone and we purchased a new iphone 8. The next day he noticed that the phone was not working properly and he took it back to the AT&T where we bought it. They said to file an insurance claim or take it to the Apple store. We went straight to the Apple store and made an appointment. When my son went back to Apple they said that this was a refurbished phone and it was non functioning. They can tell by the phone serial number of the phone.

When I called AT&T they just said they were surprised and what did I want. I can't believe they were committing fraud and are so flippant about it. And why suggest I file an insurance claim when you sold me a phone that never worked. I feel like they fool who got stuck with the junk and they can laugh all the way to the bank. Does this seem like responsible professionals? This makes me question all of the products I have purchased.