Hardware problem, is there any way to fix this?

I'm already out of warranty and have been out of warranty for some time now. I guess my question should be have there been any recalls to fix this widespread problem or is there a way they can fix their hardware problem for free

You could try a soft factory reset. For info on how to do this check
HERE.

When you get the option to reset, choose 'Reset and keep my games & apps'

^^^

It might be too late for that since it's already scratched and if it's bad enough, it wouldn't be able to read the disc properly in order to install.

Your best bet is trying to return and exchange it since it's been less than 7 days.

Gamestop might give you some trouble since they are always pushing that 3 dollar scratch insurance...but even with that, I dont think they swap it...they might just repair it instead.

If you bought it from a retail chain store, you might have a greater chance for a swap.

Your local game store may be able to fix it. Some game stores have a machine which takes a layer or two off the disc, which makes it playable, but be aware it doesn't always work.

Install to HD disk always. XBox will then only spin up the disk to confirm that you own the disk. Not only do you lower the risk of scratched disks but you can continue to use scratched ones. For example, I have an old Mass Effect 1 & a Perfect Dark Zero
disk that were scratched; I borrowed a friend's copies to install but can still use my own to play the Hard Disk content.



In the case of GTA V, you need to install the "Install" disk to the Hard Drive and they recommend not to install the "Play" disk to the same drive. However, you could install an unscratched "Play" disk to a USB drive instead. Hopefully, you can then continue
to play GTA V (with the scratched disk for license purposes)