The headphones are probably not faulty at all.
AKG's K7 series is famous for needing lots of burn-in and is very picky with amps. You could even say they're amp-reliant.
The K701/02's for example, are said to need anywhere from 150-300 hours of burn-in. The K712 is no exception, so of course they wouldn't sound great out of the box.
The K7 series also have amazing amp scaling, and one of the only series that are so amp-reliant that people would actually spend anywhere from 2 to 4 times as much on an amp than on the headphones themselves. They have amazing benefit from an amp, and do extremely poorly with a poor power source.
To add to that, the K712 specifically are said to be extremely, extremely picky when it comes to amp pairing, even among the K7 series. The K7 series benefit from having a good current too.
To be honest, if you're only going to spend $200 on an amp, you should return the K712's, A $200 amp may actually serve you somewhat with the K701/02's (not that it'd be anywhere near optimal), but for the K712's I honestly can't see you getting half it's maximum potential even with double the budget. You'd need anywhere from $500-2k to really make these headphones shine as greatly as it can (at that point some people prefer them even over LCDs, just saying)
TL;DR
They're great headphones if you spend money on an amp properly.
They only sound bad because of the lack of current from the lack of an optimal amp, and no burn-in time.