A group of 43 members of Congress is calling for action against unaccredited companies that charge veterans for help filing for disability benefits with the Department of Veterans Affairs.
This comes in response to reporting last week from NPR that showed the claims consulting industry is using aggressive tactics to make millions off of veterans, despite warnings from the VA's lawyers that doing so may be in violation of federal law.
"For years, we have warned that unaccredited representatives — commonly known as claim sharks — charge illegal fees, misrepresent their services, and exploit a loophole in federal law to escape accountability," the group wrote in a letter Wednesday to VA, the Federal Trade Commission and the Consumer Financial Protection Bureau. "These practices represent a deeply disturbing escalation in claim shark industry tactics."
The letter was signed by 42 Democrats and one Republican.
Federal law states that anyone helping veterans prepare initial claims for disability benefits must be accredited by the VA and that the service must be free. Nonprofit veterans service organizations such as The American Legion and VFW have long helped vets with such claims.
But in an effort to reduce barriers for vets, Congress removed criminal penalties from the law in 2006. Entrepreneurs leapt into that legal gray area, realizing they could help vets and make money. The number of these claims consulting outfits has exploded over the last 10 years.
Some vets told NPR they were happy to pay for the help since it would net them more money long term. But others said they felt taken advantage of by these claims companies.
Lawmakers took particular issue with a business practice, uncovered by NPR, in which these companies use veterans' private information to access a VA system to learn about their disability benefits.
NPR's investigation into a Florida-based company called Trajector Medical found that it uses a computerized robo-dialer system to dial into the VA Benefits Hotline, an 800-number that's meant for veterans. Since Trajector is not accredited, VA won't share vets' information with the firm. So the company uses the hotline as a side door, entering vets' social security numbers to access claim updates on tens of thousands of vets who once signed up as clients. If the company finds that a vet got an increase, it sends them a bill.
Vets and former Trajector workers told NPR the system bills veterans even when the company wasn't actually responsible for the benefits increase, including in cases where the vet worked with an accredited nonprofit or filed a claim independently of the firm.
Trajector has denied wrong-doing and told NPR its mission continues to be to help vets receive benefits. The company discloses in its contracts with vets that it will use their personal information to access VA "reporting systems." The company also said it is a "medical evidence provider" and does not prepare or file forms.
But veterans like Erik Jensen, a retired deepwater diver and nurse who served 30 years in the Navy, said otherwise. NPR reviewed 28 pages of pre-filled disability claim forms that Trajector sent him to review and submit electronically to VA. "All of that was filled out," he told reporters. Trajector charged Jensen $12,000 when his claim was successful.
Lawmakers wrote in their letter that these tactics "raise serious questions about data privacy, informed consent, financial security, and whether these companies are accessing or leveraging sensitive VA-related information in ways that may violate federal laws."
New Hampshire Congressman Chris Pappas, a Democrat, is the co-sponsor of a bill to rein in the claims industry. He co-authored the letter and gathered signatures from more than 40 of his House colleagues. Rep. Don Bacon of Nebraska, a retired Air Force Brigadier General, was the lone Republican to sign.
"As the NPR investigation makes clear, aggressive and coordinated federal action is needed now," the letter says. "Claim sharks' predatory practices grow more nefarious and efficient with each passing day, robbing veterans of the benefits they earned and diverting taxpayer dollars into their own pockets."
Pappas' bill, the GUARD VA Benefits Act, would reinstate the penalties that were removed nearly two decades ago. But the legislation is locked in a stalemate with the competing CHOICE for Veterans Act, sponsored by Republican Congressman Jack Bergman of Michigan, which would set a $12,500 cap on what claims consulting firms can charge.
While Congress is gridlocked, the VA has little recourse besides sending warning letters. NPR and our partner, the nonprofit newsroom The War Horse, obtained letters the VA sent to 40 claims companies, including Trajector and other firms both large and small. Many of those businesses continue to operate.
In the letter from members of Congress, representatives asked VA, FTC and CFPB to report on what they are doing to protect veterans and uphold the law. Pappas told NPR Wednesday he believes federal agencies have enforcement authority to crack down on unfair practices by claims companies.
Retired Army Colonel Paul Kantwill served as an assistant director at the Consumer Financial Protection Bureau leading the Office of Servicemember Affairs from 2016 to 2018. Kantwill told NPR, "If I still ran the Office of Servicemembers Affairs, these complaints would be at the top of my priority list and would be taken very seriously."
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