The Perils Disabled Veterans Encounter with Unaccredited Claims Sharks

In the early 1900s, the Pension Bureau’s commissioner testified before Congress about significant fraud in awarding veterans’ benefits. At that time, unaccredited “claims agents” exploited veterans, manipulating their claims and siphoning off pension funds for their services.

To combat this issue, Congress enacted reforms that prohibited veterans from hiring lawyers to assist with their benefits claims. This changed in 1989, when new legislation permitted accredited attorneys and trained agents to charge fees for helping disabled veterans.

Currently, unaccredited companies, often referred to as claims sharks, are exploiting a loophole in federal law. While the law emphasizes that only accredited individuals can charge fees for assistance, there is no criminal penalty for those who disregard this requirement. As a result, these companies continue to operate, ignoring cease-and-desist letters from the VA and profiting immensely, often at the expense of veterans.

These claims sharks typically charge exorbitant fees to help veterans increase disability compensation, sometimes multiplying their claims five to seven times. A veteran who increases their disability rating from zero to 100% could end up paying around $20,000 to these sharks. In contrast, this same service is available for free through accredited attorneys or veteran service organizations, as mandated by federal law.

Claims sharks frequently argue that their services are essential for veterans to secure benefits. However, this claim often lacks substance. If these individuals genuinely cared about helping veterans, they would operate within the bounds of federal law.

Accredited attorneys adhere to ethical guidelines and operate with oversight, ensuring the protection of their clients’ interests. In contrast, unaccredited companies work without accountability, leading to potentially destructive outcomes for veterans. Clients may find themselves facing sanctions from the VA for fraudulent claims pushed through by these companies, which often advise them to conceal these arrangements from the VA. One notorious claims shark has faced lawsuits for instructing employees to falsify disability examinations to secure higher ratings.

These sharks also lack access to veterans’ claims files, which impairs their ability to make informed decisions about their clients’ cases. The VA claims process is intricate and requires specific knowledge to navigate successfully. A mistake as minor as filing the wrong form can result in decades of lost retroactive benefits — a reality that these companies disregard. Moreover, if these sharks mishandle a case, there are no malpractice protections for veterans, leaving them without recourse.

Misrepresentations about their accreditation status are prevalent among these companies. They often claim that “the VA won’t accredit companies,” which is technically correct but misleading. While law firms aren’t accredited in their entirety, the principal attorney must possess accreditation, and all filings require their signature. However, firms operate with a team of associates under the principal attorney’s oversight.

The bottom line is that these companies avoid accreditation to bypass legal obligations that would limit their profit margins, reaping millions from disabled veterans unchecked.

Legislators must act to prevent Arizona’s disabled veterans from falling victim to these predatory practices. Proposed legislation should mandate that any individual seeking to charge fees for benefits assistance be accredited by the Department of Veterans Affairs, protecting veterans and curtailing the claims sharks’ operations.

Derek Debus, a disabled Marine infantry veteran and director of Military and Veterans Law at Stone Rose Law, advocates for reform in this area, emphasizing the need for accountability in veterans’ benefits assistance.