Warranty Fraud: 7 Types Product Brands See and How to Prevent Them

Last updated: October 21, 2026

Every warranty program pays some claims it shouldn't. Usually it isn't organized crime. It is a receipt with the date changed, a phone that was dropped and described as "stopped working," or a repair shop billing for a part it never replaced. This guide covers the seven types of warranty fraud product brands run into, how big the problem is, the warning signs, and a prevention playbook that doesn't make honest customers feel like suspects.

What Is Warranty Fraud?

Warranty fraud is any attempt to get repairs, replacements, refunds or payments under a warranty that the claimant isn't entitled to. It can come from anyone in the chain: the end customer, a retailer, a dealer, or the service partner doing the repair.

Some of it is deliberate and organized. Much of it is opportunistic: a customer who isn't sure their product is still covered and rounds the purchase date in their favor. Both cost the same money, and both get easier the less the brand knows about who bought what, and when.

How Big Is the Problem?

Nobody has an exact number, because the fraud that works is the fraud you never see. The figures that do exist give a sense of scale:

• 3% to 15% of warranty costs. This is the range given in Warranty Fraud Management (Wiley, 2016), the standard book on the subject. The authors note that warranty costs themselves typically run at 1% to 4% of sales.
• $29.2 billion in claims. That is what U.S.-based manufacturers paid in warranty claims in 2024, up 9% from 2023, according to Warranty Week's annual report. Even at the low end of the fraud range, that is close to a billion dollars a year in one country.
• Up to 10% of warranty expense from dealers and servicers alone. Warranty Week has estimated that dealer and servicer fraud can reach 10% of warranty expenses.

Then there are the cases that reach court. In August 2026, a federal judge in Los Angeles sentenced the leaders of a ring that swapped thousands of counterfeit iPhones and iPads for genuine replacements under Apple's warranty programs. The losses were at least $16.2 million. The fakes carried serial numbers copied from real devices owned by real people, which is exactly why they passed.

You don't need to be Apple to have this problem. A smaller brand has fewer claims, but usually fewer checks too.

The 7 Types of Warranty Fraud

1. Out-of-warranty claims

The most common type, and the hardest to call fraud. The product is 26 months old, the warranty is 24 months, and the claim says it was bought "last year." Without a registration date or a receipt, the brand has to take the customer's word for it, or argue with them.

2. Fake or edited receipts

Receipts are easy to edit and easy to generate. A changed date moves a product back into coverage. A receipt from a store that doesn't stock the product, or with a price far below retail, is a common giveaway. Some claimants reuse one genuine receipt for several products.

3. Serial number reuse and counterfeit swaps

The claimant presents a serial number that belongs to someone else's product, either on a counterfeit device or on a broken unit of their own. The Apple cases above are this type at scale. Smaller versions are common for anything with a printed label: one valid serial number found online, used on claim after claim. Sequential serials make this easier, because one real number reveals the next; random serials with a check character, which our free serial number generator creates in bulk, are much harder to guess.

4. Owner damage presented as a defect

A dropped speaker, a water-damaged phone, an e-bike motor that failed after being ridden through floods. The claim says "stopped working" and leaves out the cause. Most standard warranties exclude accidental damage, so this is a claim for something the warranty never covered.

5. Gray-market products

A product bought cheaply in one country, sometimes from an unauthorized seller, is claimed under the warranty of another country where coverage is longer or service is better. The product is genuine, and so is the purchase. The claim isn't.

6. Dealer and service partner fraud

This is where the largest amounts often sit, because partners file many claims and the brand rarely sees the product. Warranty Week lists the common patterns: overcharging for repairs, replacing parts instead of repairing them, billing both the manufacturer and the customer for the same job, using cheaper parts than claimed, submitting the same invoice twice, and scheduling work just before a warranty expires.

7. Refurbished or used products registered as new

A returned, refurbished or second-hand product is registered as a new purchase to restart the warranty clock. Without a link between the serial number and its first registration, the brand has no way to see that the product already had an owner.

Warning Signs to Watch For

None of these proves fraud alone. Together, they tell your team which claims deserve a second look:

• The purchase date is just inside the warranty period, and the product was never registered.
• The receipt doesn't match the product: wrong store, wrong country, a price far below retail, or a format that doesn't match the retailer's real receipts.
• The same serial number appears on more than one claim, especially from different people or addresses.
• One serial number is registered by different owners within a short time.
• The claim describes a defect, but the photos show damage: cracks, dents, corrosion, liquid marks.
• A service partner's claim rate is far above its peers for the same products, or its average claim value keeps rising.
• Many claims arrive from one address, email domain or partner within a short window.
• The claimant is in a hurry: they push for a replacement or refund and resist troubleshooting steps that would show what's actually wrong.

How to Prevent Warranty Fraud: A Playbook

The goal is to make fraud harder without adding friction for the honest majority. Most prevention comes down to one idea: know who owns each product before anything goes wrong.

1. Register the product at the start, not at the claim

Most warranty fraud depends on the brand learning about the product for the first time when the claim arrives. Registration close to the purchase date fixes that. The serial number, the owner, the purchase date and the coverage period are on record months before anyone has a reason to bend them.

The obstacle is the registration rate. Paper cards and long web forms get very few owners to register. A QR code on the product or packaging that opens a short registration page, with no app or account, gets far more. This is why product registration is the first fraud control, not an afterthought. Our warranty registration guide covers how to get more owners through it.

2. Ask for proof of purchase at the right moment

Ask for the receipt when the customer registers, while it's still in their inbox or bag, not two years later when they file a claim. A receipt uploaded at registration also makes the honest customer's later claim faster, because the proof is already attached.

For customers who never registered, accept the claim but require proof of purchase before anything ships.

3. Validate serial numbers

Check that every serial number in a claim exists, belongs to the product being claimed, and hasn't been claimed before. If your serials include a check digit or follow a known format, validate that first. A product page tied to each serial number, opened by the QR code on the product, makes this almost automatic: the customer doesn't type a serial number at all, the product tells you which one it is.

If you print GTINs on your products, make sure they're valid before they go on the box. Our GTIN check digit calculator checks a whole list at once.

4. Require photos or video for the claims that are easy to fake

Not every claim needs evidence. "Doesn't turn on" is hard to photograph. "Arrived damaged" or "the frame cracked" isn't. Set evidence requirements per claim reason, so customers with a visible defect add a photo or short video, and everyone else isn't asked for more than the claim needs.

5. Put troubleshooting before the claim form

Many claims aren't fraud at all. They're a setting the customer didn't know about, a battery that needed a full charge, or a filter that needed cleaning. Showing relevant help articles, or an AI assistant that answers setup and troubleshooting questions, before the claim form resolves those and leaves your team with the claims that matter. It also removes the "push for a replacement" path from customers who would have been happy with a fix.

6. Write clear rules, and apply them the same way every time

Decide in advance what happens with claims that don't fit:

• An out-of-warranty claim gets a clear answer, and possibly a paid repair offer, rather than silence or an argument.
• A claim without a receipt on an unregistered product is held until proof arrives.
• A claim on a serial number with an existing claim goes to a person, not an automatic approval.

Consistent rules protect you twice: fraudsters learn there's no gap to work, and honest customers get the same treatment every time.

7. Audit your service partners

For partner fraud, the data is in your claims: claim rates per partner, average cost per repair, parts replaced per job, and timing relative to warranty expiry. Compare partners against each other for the same products. Ask for failed parts back on a sample of claims, not all of them. The goal is to spot the outlier, not to inspect everyone.

Where Veribl Fits

Veribl is built around the first point: knowing who owns each product. A QR code on the product opens a page for that exact item, where the owner registers in seconds and can upload proof of purchase. When they later file a claim from the same page, the claim arrives tied to the registration record. Ownership is confirmed through the owner's warranty code or a code sent to the email they registered with. Customers who never registered can still file, with proof of purchase.

Brands set claim reasons and the number of photos or a video each one needs. They can show help articles and an AI assistant before the claim form, so simple problems are solved first. Claims on products that are out of warranty aren't blocked; they're flagged for the team, and the customer sees the message the brand sets, such as a paid repair offer.

See how it works on our warranty claims and warranty management pages, or compare tools in our guide to the best warranty management software.

A Note on Warranty Scam Calls

If you searched "warranty scam" because someone called about your car, that's a different problem. The FTC warns that calls and letters saying your vehicle warranty is about to expire usually come from companies with no connection to your dealer or manufacturer. What they sell is a service contract, often for hundreds or thousands of dollars, which may not cover the problems you actually have.

The FTC's advice: hang up, don't press any numbers, and report the call at DoNotCall.gov. The FCC adds that scammers may already know details about your car, so knowing your make and model doesn't make a caller legitimate. If you want to check your real warranty, call your dealer or the manufacturer using a number you look up yourself.

The Bottom Line

Warranty fraud thrives in the gap between the sale and the claim, when the brand doesn't know who owns the product, when they bought it, or whether the serial number is real. Close that gap with registration at the start, ask for proof when it's easy to give, and set evidence rules per claim type. Most fraud stops there, and honest customers get faster claims along the way.