I just assembled one of those awful things for a customer at the shop last week. I wouldn't use one of these for a lawn ornament, let alone try to ride it.

What I noticed about the calipers is that there are hex screws on the backside of the mounting bolts that move them closer or further away from the frame mounts. Try playing with them first. The brakes were actually easy to adjust, even with the out of round rotors. They work about as well as old steel side pull caliper brakes.

Sounds like you got a bad caliper though. Are both of them the same way or just one?