Proximity Sensor Problem

I have brand new HSTN's... out of the box they will not function unless I have my finger over the proximity sensor on the left arm. 

I've tried all the restarts and hard reset options available. 

My temporary solution is using a piece of dental floss to tie around the left arm over the power button. It works fine as long as the floss is applying slight pressure on the sensor.

Anyone have a fixes for this or do I need to send them back?