Committee rejects bill aimed at curbing unaccredited "claim sharks" who assist veterans with VA disability claims

A bill intended to create state civil and criminal avenues to hold unaccredited individuals who charge veterans for help with VA disability claims accountable failed to pass the committee after an extended hearing and a roll‑call division.

Representative Bruce Kozart introduced HB 14‑23 with co‑sponsors and brought Will Beams (VFW National Legislative Committee/state legislative chairman) to describe the measure. Supporters said the bill would align state law with federal accreditation standards (citing 38 U.S.C. chapter 59), prevent predatory "claim sharks" from charging veterans excessive fees, and create a civil course of action in state law. Beams testified that federal rules prohibit unaccredited representatives from charging for initial claims and limit fees on appeals to 20 percent of back pay; he said many unaccredited agents operate outside those limits and sometimes charge veterans thousands of dollars for paperwork or recurring fees.

Proponents urged action to protect veterans who may be young, poorly educated, or suffering mental‑health conditions that make them vulnerable to exploitation. Testimony included examples (anecdotal) of veterans charged tens of thousands of dollars by non‑accredited agents and descriptions of nationwide activity that supporters said motivated state action.

Opponents included representatives of private veteran assistance firms (Mark Christiansen, Veterans Guardian; Ray Colas, Veteran Benefits Guide) and the Arkansas Department of Veterans Affairs (Wayne Ruthven, chief of staff). Their objections included: - The bill would criminalize or ban legitimate private‑sector services that are not currently permitted to become accredited under the VA model; several speakers said private companies cannot obtain federal accreditation the same way attorneys or some VSOs can. - The bill could eliminate “free‑market” options veterans choose and harm businesses that provide fast, upfront, contingency services (several said their firms do not charge upfront fees and provide disclosures to clients). - Language in the draft did not clearly mirror federal law; the Department of Veterans Affairs witness and industry representatives suggested adding explicit federal text (38 U.S.C. Chapter 59) or clearer definitions to avoid unintended consequences for legitimate providers.

Attorneys and veterans legal‑services representatives (Zach Baumgarten, Bowen School of Law Veterans Legal Services Clinic) said they had seen large numbers of victims, aggressive marketing by some firms, and patterns of conduct that justify state action. He urged passage, noting similar laws in other states and federal proposals.

Committee members pressed sponsors and witnesses on specifics: whether a veteran may still choose any representative; whether good actors who provide valuable services will be criminalized if they fall outside accreditation; the difference between civil remedies and criminal penalties; and how many Arkansas victims exist (witnesses said they could not provide a precise statewide count but cited anecdotal and clinic caseload evidence). The sponsor and supporters said the bill prohibits charging for initial claims unless accredited, limits fees on appeals consistent with federal rules, and would provide a criminal penalty for violations to create stronger deterrence and recourse than civil contracts alone.

At the end of the hearing Representative Stetson Painter moved to pass the bill. The motion was seconded and the committee divided the chamber for a roll‑call count; after the division the chair announced the bill had failed.

Why it mattered: Supporters argued the bill fills enforcement gaps that emerged when Congress removed a criminal penalty from federal law in 2006; opponents said the draft would sweep too broadly, penalize legitimate businesses or private‑sector options, and should be amended to more closely mirror federal accreditation text or build reporting and oversight mechanisms instead of a broad prohibition.

What remains: Sponsors said they would continue working on an amended version that addresses accreditation pathways, reporting requirements, and clearer statutory text. Witnesses asked the committee to request data from the attorney general and to consider alternative, narrower consumer protection approaches used by other states (for example, reporting requirements, fee caps, and provider registries).