White knights or gray areas? Inside the fight over who helps veterans file claims
- Rhode Island lawmakers passed a bill to protect veterans from predatory for-profit claims consultants.
- Millions of dollars are at stake in the veterans' claims consulting market.
- Debate continues regarding the role and legitimacy of for-profit claims consultants.
Just before the General Assembly adjourned on June 20, the House and Senate agreed on the final wording of the so-called “claim shark” bill. Advocates say the bill will protect veterans from being gouged by for-profit consultants who charge a fee to assist with filing disability claims. The bill passed despite heavy pressure from lobbyists representing the out-of-state firms that had the most to lose. Gov. Dan McKee is expected to sign it.
While that’s a great step forward, local advocates have won only the first battle. The war is far from over.
All this hard work could be undone if the Republican-led Congress in Washington passes legislation legalizing for-profit consultants nationwide. Rhode Island’s new law would become moot.
The for-profit companies (primarily Veterans Guardian from North Carolina and Veterans Benefit Guide, based in Las Vegas) have fought tooth and nail in every state that's considering similar laws.
Additionally, according to The War Horse, a nonprofit newsroom covering military topics, Veterans Guardian spent "$2.3 million in the last three years to lobby Congress and hundreds of thousands more on lobbying state legislators.” Veterans Benefit Guide spent close to half that amount.
Lawsuits challenge the law
After Maine and New Jersey banned the for-profit operators in 2023, Veterans Guardian sued, alleging the states were violating the company’s First Amendment right to freedom of speech.
They argued this law muzzles their ability to provide advice and assistance to veterans. The lower court ruled against Veterans Guardian, but the Third Circuit Court of Appeals overturned that decision.
Rhode Island lawmakers hedged their bets by establishing an implementation date of March 31, 2026. “As part of our due diligence, we thought we should give ourselves time to see where this court case goes,” Sen. Walter Felag told me.
Too much money is at stake for this to be over
A 2021 Securities and Exchange Commission filing suggested that the VA claims consulting market was worth $73 billion a year. That number is even higher today, because the 2022 passage of the PACT Act significantly expanded the number of veterans eligible for compensation.
With that much money on the table, the gloves come off.
Trajector Medical is a Florida-based company specializing in gathering medical evidence for disability claims. In late 2021, they advised the SEC that they intended to go public, thus providing a rare peek behind the financial curtain. Their filing showed $127 million in revenue in the previous 18 months … and they are only a supplier to for-profit consultants.
Private firms like Veterans Guardian and VBG are not required to disclose revenues or profits, as Guardian CEO Bill Taylor made abundantly clear when he testified before Congress earlier this year.
Black knights, white knights and gray knights
On the surface, this sounds like a “feel-good” issue, with the white knights protecting the veterans and their treasure. If only it were that simple.
The black knights, according to the May 24, 2024, Washington Post, are most of the 100 or so “unaccredited, for-profit companies now making hundreds of millions of dollars … in exchange for veterans signing away thousands of dollars in future benefits.”
Claim consultants argue that they do not act as agents or attorneys on behalf of veterans, so they are not required to be accredited.
In 2023 Veterans Guardian and Veteran Benefits Guide joined forces to create and fund a new trade organization to represent their interests in Washington.
Called National Association for Veterans Rights (NAVR), they hired award-winning TV reporter Ashleigh Barry as senior VP of communications 18 months ago. Barry stated, “The NAVR alliance provides non-representational services, including educational support, documentation assistance, and help understanding eligibility criteria. They do not represent claimants, communicate with the VA on their behalf, or act in any legal manner.”
The Washington Post reported in May 2024 that “the veteran technically ‘submits’ the claim, while the company often actually fills out the paperwork.”
The overwhelmed VA says, “The government is all but powerless to stop the practice, particularly since Congress years ago stripped criminal penalties from the law.”
Sadly, the VA and others have too often proven to be incapable guardians of veterans and their treasure.
Backlog and bureaucracy seem to stand in the way of veterans and their benefits
In 2013, the Veterans Benefit Administration announced that it hoped “to eliminate the backlog and process claims with 98 percent accuracy by 2015.”
Good luck with that. According to the VA’s website, as of May 31, there were more than 800,000 claims pending, with the average wait time being about five months. As of June 14, the 12-month claim-based accuracy was just over 80%. Put another way, one out of every five claims filed contains errors – either by the veteran, the agent who submitted the claim, or the VA employee who processed it. Each error results in further delays and stress on the system.
That’s another reason the so-called “claim sharks” have proliferated. They promise accurate submissions.
As a result, a third group has stepped into the breach.
What I call "gray knights" acknowledge that many of the companies trying to tap this market are disreputable, but they argue that an entire industry should not be banned just to get rid of the bad apples.
If you hire them, they claim your paperwork will be submitted more quickly and accurately, and you will end up with more money. They say VA service providers are poorly trained, and there are not enough of them. The gray knights hawk their expertise and knowledge of the system to a target-rich market of frustrated customers.
Unaccredited, for-profit claim companies continue to operate, creating what The Washington Post called an “unregulated shadow industry.”
Leah Rosenbaum called them “guardians of greed” in her War Horse story. “They’re not really out for the interest of the veteran,” said Rep. Mark Takano, a Democrat from California and the ranking member of the House Committee on Veterans’ Affairs. “They’re out to see if they can steal money from that veteran.”
Arguments against 'claim shark' bans
Rhode Islander Patrick Murray served nine years as national legislative director for the VFW. He acknowledges this is not a black-and-white issue. “There is some truth to a number of the complaints the claim sharks make about the current system,” he told me.
“Ask yourself why so many veterans are willing to pay a fee for something they could get at no cost,” he said. Those with a deep distrust of the VA view the VA-accredited claims agents simply as an extension of the VA.
Taylor, the CEO of Veterans Guardian, insisted that the VA’s broken claims system is the real problem. In an interview with War Horse, Taylor said 70% of Veterans Guardian’s clients have already tried the free VA agent route.
What is happening elsewhere?
While everyone agrees that a federal solution is needed, foot-dragging in Congress has caused states to try to resolve the issue on their own. The result is a patchwork of diametrically opposing bills. At least three bills are still pending in the U.S. House, with others to come in the Senate.
Last month, a bill favorable to the for-profit operators (HR3132) cleared committee on a party-line vote, thus advancing it to the full House. Known as the CHOICE Act, it would allow for-profit companies to charge fees for helping veterans file disability claims nationwide. It has 14 cosponsors, all Republicans. During markup, a proposal was made to replace the CHOICE Act with the Guard Act (similar to state legislation banning for-profit consultants). That proposal failed by a 12-11 vote, showing how tightly contested this issue is.
Rep. Chris Pappas, a Democrat from New Hampshire, called the CHOICE Act “deeply concerning legislation” that allows claims consulting companies “to continue to be able to expand the profit center that they’ve developed on the backs of our veterans.”
The Guard Act remains alive, in committee. It has 92 cosponsors, including 12 Republicans.
Where the RI delegation stands
All our congressmen and senators support some version of the Guard Act.
- Rep. Seth Magaziner responded, “I am a cosponsor of [the Guard Act] … to hold ‘claim sharks’ accountable."
- "Congressman [Gabe] Amo is a proud co-sponsor of the GUARD VA Benefits Act and believes we must put a stop to predatory actors who take money from veterans …”
- Sen. Jack Reed co-sponsored the Guard Act last Congress, but it has yet to be reintroduced in the Senate.
- Sen. Sheldon Whitehouse stated, “We cannot have unaccredited claim sharks preying upon Rhode Island’s disabled veterans … as they try to navigate complexities of the VA benefits system.”
I believe the best approach is somewhere in the middle. We should remove the “no fee” requirement from the accreditation process, allowing fee-based consultants to operate. It is more important that they be trained and be held accountable than it is to deny them an opportunity to make money. Veterans should have the choice to pay for such services.
However, it is critically important that we also guarantee strong consumer protections. Congress owes it to us to enact simple, enforceable legislation.