I have a similar problem with mine . After the last firmware update the effect now doesn't work: the switch"activate"doesn't active the delay and the led upon it doesn't work too. 



Could you go into system mode of the TimeFactor and check if it's serial number is correct?  I don't have a TimeFactor in front of me right now, but from memory I think you'll need to press the algorithm selection encoder and the right footswitch at the same time to get into system mode, then turn the algorithm selection encoder to scroll through the menu options until you get to Utils, then press the algorithm selection encoder to go into Utils, then turn the algorithm selection encoder until you see SERIAL, then press the algorithm selection encoder to go into SERIAL, and then note what you see there so you can let us know if it's your correct serial number.  To exit system mode, press the the algorithm selection encoder and the right footswitch at the same time again.