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Panel hears dueling views on 'claim-shark' laws; committee asks LSO to collect state and federal drafts for further study
Summary
The committee heard competing testimony on whether the state should bar unaccredited providers from charging veterans for claims-assistance services and asked staff to gather state and federal bill texts and evidence of predatory practices for further review.
Staff briefed the committee on state and federal legal frameworks that govern who may receive compensation for assisting veterans with Department of Veterans Affairs (VA) benefit claims. Talise Hansen, committee staff attorney, summarized federal rules requiring accreditation to act as a representative before the VA, noted Congress removed some criminal penalties in 2006 and briefed the committee on a wave of state bills addressing so-called “claim sharks.”
Public testimony included: a VFW representative who urged the state to prohibit unaccredited persons from charging veterans and to include enforceable penalties; an industry representative and CEO of a consulting firm who described operations that provide fully developed claim assistance on a contingent-fee model and said a recent Third Circuit decision vacated a lower court injunction in New Jersey; and representatives who said reputable companies can speed adjudication by submitting fully developed claim packages.
Committee members heard these principal points: - State and federal law: Federal law requires accreditation for persons acting as an agent/representative before the VA; the VA enforces accreditation rules but enforcement tools at the federal level have been constrained since 2006, prompting states to act. - Predatory practices: Witnesses and staff described practices in which some for-profit firms charge upfront or excessive fees or operate in ways that veterans’ advocates say harm clients. Eight states already have statutes that restrict unaccredited providers; some other states passed consumer-protection bills in 2024–25. Utah’s bill became law in March 2025 (staff summary), and several states have introduced similar legislation. - Industry perspective: Private firms said they operate on contingent-fee models, provide technology and staff resources to develop claims (often using the fully developed claims process), and that bans on fee-for-service advising would deny veterans an option that many choose after using free services.
After questioning and public testimony, committee members agreed not to draft a bill immediately. Instead, members asked the Legislative Service Office to compile: existing state statutes and model bills (including the SAVE/Choice-type bills and the New Jersey/Third Circuit litigation record), pending federal draft legislation, and empirical complaints/evidence of predatory activity. Committee members asked for those materials and suggested a target date for committee study materials in advance of the August meeting.
Ending: Committee did not adopt legislation at the meeting. Members requested staff compile comparative statutes and pending federal measures and return with recommended drafting options; no draft was filed at this session.
