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Panel backs bill to curb paid preparers who charge veterans for claims
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Summary
The Veterans Affairs Subcommittee voted unanimously to report S.695, the South Carolina Safeguarding American Veterans Benefits Act, which would bar unaccredited individuals from charging for initial veterans benefits claims and impose penalties for violations. The department supports the measure, and an amendment could be offered at the full committee.
The Veterans Affairs Subcommittee voted unanimously to report Senate Bill 695 — the South Carolina Safeguarding American Veterans Benefits Act — to the full committee after hearing testimony that the measure would protect veterans from unaccredited paid preparers who charge fees for preparing benefits claims.
Todd McCaffrey, secretary of veterans affairs for the State of South Carolina, told the subcommittee the department "very strongly supports" the bill and described a nationwide problem of unaccredited preparers he called "claim sharks" who charge veterans up-front fees for initial claims. "This bill protects South Carolina veterans," McCaffrey said.
The bill would set limits and require written fee terms for anyone seeking compensation to prepare a veteran's benefits claim and would create penalties for noncompliance. McCaffrey said accredited representatives — including attorneys and former VA-accredited advocates who submit claims through the Veterans Benefits Management System or state tools such as VetPro — are not targeted by the legislation. He told lawmakers that accredited county offices and chartered veteran service organizations such as the American Legion and the VFW typically provide initial-claim preparation services for free.
Committee members pressed the department on how accreditation works and on exemptions for staff at veterans homes. McCaffrey said the state runs accreditation training for county officers and provides documentation to the U.S. Department of Veterans Affairs; he confirmed that veterans home staff assisting residents are not intended to be charged under the bill and that residents are typically already linked to the VA before admission. One senator urged care to avoid curbing well-intentioned nonaccredited volunteers who help veterans, and McCaffrey said the bill bars compensation for unaccredited preparers but does not prevent unpaid assistance.
The transcript includes a description of common fee amounts charged by unaccredited preparers — "low dollar claims $300 to $500 or $1,000" — which proponents described as examples of the predatory conduct the bill aims to stop. The draft discussed at the hearing also includes proposed penalties; a committee member summarized the bill's penalty provision as exposing violators to a misdemeanor fine of up to $1,000, imprisonment for up to 30 days, or both.
A witness and a committee member noted related federal activity; McCaffrey referenced pending federal legislation (referred to in the transcript as "H 31 32") and cited the Veterans Choice Act as broader federal context, while stressing the state bill focuses specifically on unaccredited, for-profit preparers. The bill's sponsor said the draft is modeled in part on Maine's 2024 law and that the full committee may consider cleanup language in an amendment.
After discussion, a motion to report S.695 favorably was made and seconded; the subcommittee voted and the motion carried unanimously. Committee members reserved the right to offer amendments at the full committee stage. The subcommittee closed the hearing and thanked the witness.
The bill will move to the committee of jurisdiction, where members indicated they may offer language changes before any final floor action.
