Pappas Chairs Joint Hearing on Predatory Claim Sharks Targeting Veterans’ Benefits, Questions VA Efforts to Protect Veterans

A full recording of the hearing can be viewed here.

On April 27, Congressman Chris Pappas (NH-01), Chair of the Oversight and Investigations Subcommittee of the House Committee on Veterans' Affairs (HVAC), led a joint Subcommittee hearing on the Department of Veterans Affairs (VA) Accreditation Program for individuals who assist veterans with VA disability claims. The hearing highlighted the rise of unaccredited disability claims consultants who target veterans for financial exploitation.

Unaccredited claims consultants are not subject to VA standards, strategically advertise their services to avoid regulatory oversight, and, as a result, may engage in predatory and unethical practices targeting veterans and rob them of their VA disability compensation benefits.

"For decades, federal law has prohibited anyone from helping a veteran prepare or present a VA benefit claim without accreditation," said Congressman Pappas, "Despite this black-letter law, there's been an explosion in the number of unaccredited, for-profit companies who say they're not preparing or presenting claims…However, if you read the fine print, they also charge veterans hundreds, if not thousands, of dollars."

Pappas continued, "...there are many other veterans who have complained about exorbitant costs, hidden fees, difficulties canceling a contract, aggressive marketing emails, rampant collection calls, and other predatory practices that many unaccredited companies employ. Some companies even solicit veterans' eBenefits usernames and passwords, or try to gain direct access to people's bank accounts…Some veterans may be willing to pay a fee if the services they receive are worthwhile and a company's business practices are above board. But without adequate oversight through the accreditation process, we cannot be assured that this is case."

Witnesses at the hearing included representatives from VA, Veterans of Foreign Wars (VFW), The American Legion, National Organization of Veterans' Advocates (NOVA), Veterans Guardian VA Claim Consulting, LLC, and Trajector, Inc.

Pappas began by questioning VA officials on the importance of criminal penalties in deterring bad actors:

Chair Pappas: "I just want to move on to the penalty issue that you've raised as well. Can you expound upon why you think reinstating this criminal penalty would help enforce the law in a more optimal way?"

Richard Hipolit, Deputy General Counsel for Veterans Programs VA: "Yeah… I think it would be important to have a consistent national standard on what's allowed and what's not. Also I think it would act as a strong deterrent as if there's a potential criminal penalty involved people will take notice of that and I think it would deter a lot of people from getting involved in things they shouldn't."

Pappas also questioned Veterans Service Organization (VSO) representatives on whether complaints received by the Federal Trade Commission (FTC) about unaccredited claim consultants appropriately reflect what they have heard from the veterans they work with:

Chair Pappas: "Mr. Callaghan, maybe I can start with you. I'd like to read just a few of the complaints that the Federal Trade Commission has received about unaccredited claims companies over the past several years. Here's one: ‘it's really just a scam. The company does nothing but attach their name to documents…This company works by doing trickery. I was under the impression that I pay the difference of my increase for five months. Not true. They want a third of your back pay.'… So Mr. Callaghan, can you reflect on these complaints and are these consistent with some of the feedback that you've received?"

Marty Callaghan, Deputy Director of Benefits & Claims Services, the American Legion: "Thank you for the question, Chairman Pappas. They are consistent. We have received many complaints via our service officers in the field and also directly from veterans. We have received complaints from these predatory companies that charge upfront fees and then do nothing all the way to being convinced to invest money for future benefits that are then denied in the individuals left with a debt, to a surviving spouse who was convinced to make an investment based on her future benefits and then was denied the claim. So these are all very concerning to us. We understand that people want to have businesses, and we understand that people wish to have profit margins. We feel like if that's what their motive is, if their motive is profit rather than service, they should get into another line of work."

In February, Pappas called for and received a briefing from VA on its strategy to raise awareness of and better protect veterans from these predatory practices.

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