People participate in the 105th annual Veterans Day Parade on Nov. 11, 2024, in New York City. Hundreds of people lined 5th Avenue to watch the biggest Veterans Day parade in the United States. This year’s event included veterans, active soldiers, police officers, firefighters, and dozens of school groups participating in the parade, which honors the men and women who have served and sacrificed for the country. (Photo by Spencer Platt | Getty Images)
For-profit consultants across the country make millions each year by charging military veterans for help in filing their disability claims with the U.S. Department of Veterans Affairs.
The practice exists in a legal loophole: It’s illegal under federal law for companies that aren’t accredited by the VA to charge veterans fees for helping file their disability claims, but there’s no criminal penalty for breaking the law, and many consultants contend that the services they provide aren’t explicitly forbidden. Recent attempts to regulate this for-profit shadow industry have stalled in Congress.
While some state lawmakers are trying to close the loophole by filing bills to restrict the practice, they’re up against their legislative peers and a cadre of industry leaders with a stable of lobbyists who want the loophole sealed into place at the state level.
Three states — Maine, New Jersey and New York — passed laws in the past year cracking down on for-profit consultants. Similar bills were introduced in 17 other states.
Meanwhile, Louisiana enacted a law hailed by the for-profit industry as a win; it allows companies to charge up to $12,500 in fees for a task that veterans service organizations such as The American Legion will do for free.
The issue is pitting veterans against one another.
“When we have organizations and companies out there like these claim sharks that are preying on our veterans and taking away their hard-earned benefits and making a profit off them, there’s something empirically wrong with that,” said Missouri Republican state Rep. Dave Griffith, a former Green Beret in the U.S. Army 8th Special Forces Group.
Griffith introduced a bill earlier this year that would impose criminal penalties on those receiving compensation for helping a veteran apply for benefits. The bill died in committee, but Griffith has refiled it for the upcoming legislative session.
“What’s even more disturbing to me,” said Griffith, who served in Vietnam, “is that many of these organizations are run by veterans.”
The for-profit consulting industry argues that veterans should have the freedom to hire whomever they want to help them navigate the VA’s plodding, glitchy application process. Disability claims currently take four or five months on average to resolve, according to VA data, though some languish for a year or more.
Some veterans have reported that the expense is worth it — and have chided the government for not doing a better job marketing directly to vets about how to get their benefits.
The companies charging exorbitant fees, industry representatives say, are just a few bad apples.
“The key for us is having transparent disclosures, processes and statements of fees so veterans can make informed decisions,” said Peter O’Rourke, president of the National Association for Veteran Rights, a newly formed trade association for the claims consulting industry. O’Rourke, a U.S. Navy and U.S. Air Force veteran, was formerly acting secretary of Veterans Affairs during the Trump administration before he was forced out in 2018.
O’Rourke estimated he and his team have been to 38 states to testify at committee hearings and speak with legislators.
“There’s a better way of doing business, and we need to have more of that discussion, versus going back in time and criminalizing what the market has been able to provide veterans,” he said.
Promises and profits
The urgency from all sides of the issue follows Congress’ passage two years ago of the PACT Act, the largest expansion of veterans’ benefits in generations. It offers disability-related benefits for veterans suffering from the effects of Agent Orange, toxic burn pits in recent wars and other toxic exposures over the past several decades. Under the act, millions more veterans could qualify for aid.
That increased funding represents a potential bonanza for private consultants who promise to help military veterans access it — for a price.
Veterans with a service-related disability, from cancer to asthma to depression, can apply to receive a monthly cash benefit from the government. Their checks could range from $500 to more than $4,000 per month, depending on the severity of the disability and other factors, such as their number of dependents.
But getting approved takes months. The claims process — sluggish and riddled with glitches, according to veterans and the VA’s own data — requires a lengthy application and detailed medical documentation.
Enter the private claims consultant. For a fee or a cut of a veteran’s future disability benefits — often five times what the veteran stands to receive from the VA, amounting to thousands of dollars — the consulting company promises to help smooth the process and maximize the veteran’s disability check.
“Veterans are often facing delays with the VA, and I can see why there’s a desire to get results. But these companies sometimes use exploitative practices and seize a big chunk of your benefits,” said Florida Democratic state Rep. Anna V. Eskamani. She partnered with Republican state Rep. Michelle Salzman, an Army veteran, to introduce a claim shark bill in the most recent legislative session. The bill died in committee, but Eskamani said they plan to continue talking with veterans and introduce a similar bill next session.
Since January, Republican and Democratic lawmakers in at least 17 states — from Rhode Island to Mississippi to California — have introduced bills to ban or restrict private claim consultants from profiting off veterans.
Most are based on the federal GUARD Act, currently stalled in Congress, which would impose penalties on unaccredited consultants who charge veterans for claims filing assistance. Organizations such as the Veterans of Foreign Wars and The American Legion have been outspoken supporters of the GUARD Act and similar state efforts to rein in for-profit consultants.
Last year, New Jersey became the first state to make it illegal for anyone lacking VA accreditation to charge a veteran for assistance filing a disability claim. Maine and New York soon followed.
The VA grants accreditation to attorneys, veterans service organizations and other claims agents that meet certain requirements, such as a background check and a written exam. Organizations such as the VFW and The American Legion provide their services for free, though attorneys and agents are allowed to charge fees to assist with some claims, including appeals.
When we have organizations and companies out there like these claim sharks that are preying on our veterans and taking away their hard-earned benefits and making a profit off them, there’s something empirically wrong with that.
– Missouri Republican state Rep. Dave Griffith
Griffith, the Missouri legislator, modeled his bill after the New Jersey law. When he first began researching the issue, he said, he didn’t like what he saw. Often, he said, companies will charge a fee for their services equal to five times the increase of the veteran’s monthly benefit.
For example: A new veteran approved for 100% disability receives about $3,800 per month from the VA. For help filing that claim, a consulting company might charge a one-time fee of about $19,000.
In some cases, Griffith said, consultants can pocket as much as $30,000 through tactics such as holding onto a claim for months before filing so that they can take their cut from the substantial backpay that the VA eventually awards the veteran.
Criticism and pushback
O’Rourke said his group is in favor of some legal guardrails at the federal or state level to protect veterans from exploitation, such as setting certain limits around fees or requiring transparency in contract agreements. But, he said, private consulting should be freely available because the VA and its current accreditation process haven’t kept up with the needs of veterans.
“We’re looking at, after 20 years of war, a strain on our social infrastructure when it comes to how we take care of veterans,” he said, noting that the VA’s claims and appeals process is decades old, complex and cumbersome to navigate, even with accredited groups offering help. “Asking veterans to go into a system that uses a lot of their time and causes frustration … veterans are going to try to find workarounds for that.”
Groups including the VFW have been vocal opponents of for-profit consulting companies, urging lawmakers to take action and waging public relations battles against the industry. For-profit companies have been investigated by media and officials in states including Texas and Louisiana for potentially illegal practices.
Last year, the VA issued a fraud alert, warning veterans to avoid consultants who aren’t accredited.
But the industry is pushing back. One of the largest for-profit consulting companies spent more than $800,000 last year and $780,000 this year in federal lobbying efforts, according to data compiled by the nonprofit OpenSecrets. That included pushing for a bill that would make the legal loophole permanent. At the state level, representatives from some of the industry’s largest players are showing up in statehouses across the country to speak against bills.
“I got very close to getting my bill passed last year,” said Griffith. But claims consulting companies hired a lobbyist in Missouri, he said. “They lobbied the [House] speaker’s office and he delayed the bill.”
During a committee hearing, Missouri legislators heard opposition to the bill from O’Rourke, who also testified against Eskamani and Salzman’s bill in Florida.
“I was surprised at the amount of money they’re willing to spend to try to keep things the way they are,” said Eskamani, who said she didn’t expect to see such a concerted effort to stop a bill in its first committee meeting.
In June, Louisiana quietly enacted a law that will allow unregulated companies to profit from assisting veterans with their disability claims, though it caps consulting fees at $12,500. Republican Gov. Jeff Landry allowed the bill to become law without his signature. It marked an about-face for Landry: When he was the state attorney general, he worked to shut down the types of consulting businesses the law now explicitly allows.
Similar bills were introduced this year in Arizona, Georgia, Hawaii and Kentucky, but did not pass.
Last month in Alabama, members of the legislative committee for the state veterans affairs department voted to work with state lawmakers on a bill to prohibit claims consultants from profiting off veterans. The issue is likely to show up again next year in state legislative sessions around the country.
This story was originally produced by Stateline which is part of States Newsroom, a nonprofit news network, including the Daily Montanan, supported by grants and a coalition of donors as a 501c(3) public charity.