A new California law prevents companies from charging veterans for VA claims.
California has passed a new law that sharply limits private businesses that charge veterans to help file disability claims with the Department of Veterans Affairs. Supporters say the move would save veterans from expensive and confusing fees, while critics say it could reduce options for those seeking help. Gov. Gavin Newsom signed the law this week, targeting companies often called “claim sharks” that have grown as more veterans seek help navigating the VA system.
For many veterans, applying for VA benefits can be stressful and difficult to understand. The paperwork is detailed, the rules can feel unclear, and the process often takes months or longer. In recent years, private companies have offered help, sometimes promising faster results or higher disability ratings. Critics say many of these businesses charge exorbitant fees while providing little meaningful support.
Under the new law, private companies not approved by the VA are prohibited from charging veterans for helping them file disability claims. Federal law already prohibits such fees, but the criminal penalties were removed years ago, allowing companies to operate with little enforcement. California’s law reinstates the penalties at the state level, making the practice illegal within its borders.
Advocates point to reports that veterans are billed thousands of dollars for basic assistance, sometimes amounting to several months of disability payments. In some cases, fees increase depending on how high a veteran’s disability rating is. Lawmakers and advocates say it created a system where companies directly benefited from veterans’ injuries.
State officials said California’s large veteran population made the action necessary. Lawmakers supporting the bill called it a fairness issue, saying veterans should not have to pay hefty fees to access benefits they already earned through services.
Organizations serving veterans strongly supported the legislation. Groups like the American Legion and Veterans of Foreign Wars already help veterans file claims at no cost. These organizations argue that free, accredited help is widely available and that paid services often create confusion by siphoning money from veterans who are already struggling financially.
Opposition to the law was emphasized. Some veterans and lawmakers argued that it limited choice rather than solving fundamental problems with the VA system. He said the disability claims process was slow and frustrating, and that some private companies offered useful guidance. A handful of lawmakers with military backgrounds voted against the bill, saying veterans should be trusted to decide how they want help.
The bill passed easily after hours of testimony from veterans, lawyers, and business representatives. Companies affected by the law spent heavily on lobbying efforts to block or weaken it, arguing that banning the fees could leave some veterans without help.
Proponents counter that the law is about safety, not speed. He says veterans are often approached during vulnerable moments, including periods of injury, financial stress, or mental health challenges. They say banning fees helps prevent exploitation and encourages veterans to use free, accredited services instead.
Advocates also acknowledge that the VA system still needs improvement. Claims backlogs, long wait times, and poor communication are common complaints. However, they argue that allowing high-fee businesses to operate doesn’t solve those problems and instead shifts the burden onto veterans.
The governor defended the law as a way to ensure veterans keep their maximum benefits. He said the move closes a loophole that allows abuse to continue and reinforces that veterans benefits are not a business opportunity, but a promise earned through service.
As the law takes effect, supporters say its success will depend on enforcement and access. They emphasize the importance of educating veterans about free resources and ensuring cooperation throughout the claims process.
Sources:
California passes law to severely limit experienced ‘claim shark’ companies
Governor Newsom signs consumer protection bill, kicks off tax cuts for doctors, cracks down on veteran fraud and abuse
