Already signed with a claim shark? What you owe and how to get out

The pitch sounds too good to be true: A company says they specialize in getting veterans higher disability ratings, that the VA's system is broken and they know how to work it. They've got testimonials and maybe even a guarantee. So, you sign a contract.

Things that seem too good to be true usually are, and although the VA system might be broken, some dude with an ad on Instagram or TikTok probably ain’t the guy to fix it. And remember what Tommy Boy has to say about guarantees.

Chances are good that if you're reading this right now, you probably already have buyer’s remorse. But you should know you also have rights. Anyone who tells you different is probably a claim shark, “consultant,” “coach” or "medical evidence service provider."

Don’t Feed the Sharks

Veterans service organizations (VSOs) and advocacy groups may have coined the term “claim shark,” but it was so good and so accurate that everyone, including Congressional representatives, use it to describe for-profit companies that charge veterans (exorbitant) fees to help file their initial VA disability claims. The term has even been used in legislation.

Just because a judge recently ruled they were in violation of federal law doesn’t mean they were somehow legal before. 

Federal law says no one can charge to assist an initial claim. The legal loophole that allowed the claim sharks to thrive comes primarily from the language in that law. It might be illegal for an unaccredited company or individual to charge veterans fees for preparing and filing an initial VA benefits claim, but he glaring problem with that law is that there’s no penalty for doing it anyway.

So the claim sharks got out a thesaurus.

They argued, sometimes successfully, that the "consulting" or "coaching" they provide doesn't technically constitute "preparation" or “filing.” If they’re not technically an “agent” under the laws governing claims preparation, they say, then it doesn’t apply to them. 

And an industry was born.

Meanwhile, VSOs are forbidden from charging fees for their services, even after the initial claim. But the law does allow for accredited attorneys to act on your behalf, and though they can’t charge for an initial claim either. Accredited agents and attorneys can charge a fee after the initial claim is awarded, however.

That fee is technically capped by what’s “reasonable.” The law seriously says this, despite the fact that what’s reasonable to you might very wildly from what’s reasonable for a claim shark.

Granted, the law also says that anything under 20% is presumed reasonable and anything over 33.3% is presumed unreasonable, but some company taking a 20-33% cut of what could be tens of thousands of dollars a veteran needs to pay past-due medical bills for doing what a veteran could do for free doesn’t sound very reasonable. 

What You Pay

There are a lot of claim shark pricing models out there, but the industry standard appears to be a one-time fee, often calculated as a multiple of expected monthly benefit increases, with five times the monthly increase being most common.

Investigative journalists have uncovered invoices as high as $20,000. Some states attorneys general say they’re as much as $30,000. That’s a steep price for something that is, again, supposed to be free.

If you don’t pay up, the sharks start to circle. Former employees of Trajector, one of the largest claim sharks, allege the company is “intent on aggressive debt collection,” even going so far as to use a “Callbot” to check on its clients’ disability ratings so they can charge them for increases—even after repeated cancellation requests. Then they start the collection calls.

Trajector, by the way, calls itself a "medical evidence service provider."

State Enforcement

At least 11 states have outlawed unaccredited companies from charging veterans, while at least six have passed laws authorizing the practice, which means the same contract can be banned by state law in one state and blessed by state law in another, even though federal law prohibits the fees everywhere.

In January, the Texas attorney general's office announced an agreed judgment and permanent injunction against VA Claims Insider (red flag on that confusing name), barring the company from collecting from consumers it misled into believing its services were free.

The order wipes out $6.8 million in veteran debt accumulated over nine years.

In May, Arizona announced a $1.95 million consent judgment against VetLink Solutions (who had no problem using the term “claim preparation”) that includes $1.2 million in restitution for veterans who paid fees, sometimes as much as $12,000. It even kept going despite two cease-and-desist letters from the VA.

Neither of these decisions makes any individual contract automatically void, but they support a simple conclusion: a claims-consulting bill is a disputable consumer debt, not a settled obligation.

How to Get Out

The most important thing veterans need to know is that federal law enshrines their right to fire an accredited representative. Even power of attorney can be revoked at any time and these rights can’t be signed away in a contract. 

For the VA, all you have to do is file the paperwork to assign another representative. It revokes the power of attorney for the old rep automatically.

For a private contract, you’ll need to find out what triggers the fee. Some of these companies also require veterans to share system logins, passwords, Social Security, and/or bank account information.

If it says the fees are due when the award is received, an accredited agent is only entitled to what "fairly and accurately reflects their contribution to and responsibility for the benefits awarded.” A shark is entitled to nothing. An unaccredited individual or company has no legal right to collect fees for helping with an initial claim. 

That being said, a paper trail to prove you no longer want these services while cutting off the shark’s access to your funds and information is always helpful. Here are some quality steps to take. 

Cancel in Writing

A phone call doesn’t really leave an exact record. Veterans who want out of a claim shark contract should email the company, state clearly that any agreement are terminated effective immediately, revoke any authorization for the firm to access VA information, or submit anything on their behalf, and request written confirmation. Oh and change your VA.gov, ID.me, and Login.gov passwords if you were forced to hand them over.

So change your representative immediately and tell the claim sharks to go eat chum. Every message becomes evidence.

Cut Off Payments

Recurring bank drafts can be shut down. Consumers can revoke authorization with the company in writing, notify the bank in writing that authorization has been revoked, and ask about a stop payment order for good measure.

Any debit the company initiates afterward is an error the bank can refund. Charges on a credit card can be disputed.

Report It Everywhere

Complain about the claim shark to anyone with a forum, but especially the Consumer Financial Protection Bureau and the VA: The VA's Accreditation, Discipline, and Fees program, the VA Office of Inspector General. Don’t forget the Federal Trade Commission or your state attorney general's consumer protection division.

State attorneys general build cases out of those complaints.

Get Accredited Help

The service you need is free almost everywhere… and attorneys are “reasonable.” The VA's accreditation search page offers a list of every attorney, claims agent, and VSO rep authorized to assist, and you should check against this list before entering any agreement. Best of all. an accredited representative can take over any claim already in motion.

It’s Up to Congress to Act

I know, what a depressing thought. Congress moves like the DMV. But there are already two bills out there that would give the laws against claim sharks some teeth. 

The GUARD VA Benefits Act would reinstate penalties for soliciting or collecting unauthorized fees. The SAFEGUARD Veterans Act would restore criminal penalties, preempt state laws that authorize charging fees, and ban the robocall systems companies use to pull veterans' claim data from VA phone lines.

Until then, it’s up to us to be vigilant for ourselves, watch our fellow veterans, and to check with the VA or an accredited VSO before signing anything.