California prohibits assistance fees on VA disability claims

from Adam AshtonCalMatters

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A booming industry that charges veterans for help getting the benefits they earned through military service must shut down or dramatically change its business model in California by the end of the year under a new law governing. Gavin Newsom signed today.

The law prohibits unaccredited private companies from charging former military service members for assistance with their claims to the Department of Veterans Affairs.

Technically, it was already illegal under federal law to charge veterans for this work, but Congress 20 years ago eliminated criminal penalties for violations, and dozens of private companies have sprung up offering to expedite and maximize benefits.

“We owe a debt of gratitude to our veteran community — for their years of service and sacrifice,” Newsom said in a written statement. “By signing this bill into law, we’re ensuring veterans and service members keep more money in their pockets, not filling the coffers of predatory actors. We’re closing this federal fraud loophole forever.”

Critics call the private companies “claims sharks” because their fees are often five times the monthly income increase veterans receive after using their services. CalMatters in September, for example, interviewed a Vietnam-era veteran who was charged $5,500 after receiving benefits that will pay him $1,100 a month.

Depending on the impairment rating, the consultation fee for claims under this model can easily reach $10,000 or more.

“We owe it to our veterans to stand with them and protect them from being taken advantage of while they enjoy the benefits they’ve earned,” said Sen. Bob Archuleta, D-Norwalk. Archuleta, a former Army officer, carried the legislation. “This isn’t about politics; it’s about doing what’s right. Making millions of dollars off the backs of our veterans is wrong. They’ve earned their benefits. They deserve their benefits.”

California’s new law is part of a tug-of-war regulate claims consultancy companies. Congress has been deadlocked for several years over whether to ban them entirely, allow them to operate as they are, or regulate them in some other way.

California is among 11 states that have taken action to ban the companies, while another group of mostly Republican-led states have legalized them, according to a report by the veteran news organization The war horse.

This division in some ways reflects the different ways veterans themselves view companies. The bill had overwhelming support from organizations that help veterans file claims for benefits for free, such as the American Legion and Veterans of Foreign Wars, as well as Democratic leaders, including former House Speaker Nancy Pelosi from San Francisco.

But the VA claims process it can take months and sow uncertainty among the candidates. Several of the claims consulting companies say they have helped tens of thousands of veterans across the country and that they have hundreds of employees.

Those trends led some lawmakers to vote against the measure, including Democrats with military backgrounds.

“We’re going to say to you, ‘Veteran, you know what, I don’t know if you’re too stupid or too vulnerable or your judgment is so bad that you can’t choose yourself,'” Sen. Tom Umberg, a Democrat and former Army colonel, said during a debate on the measure last month.

The new law was such a close call for lawmakers that nine of the 40 senators did not vote for it when it passed the chamber last month, which is considered the same as a “no” vote, but avoids offending the electorate which the legislator wants to preserve.

This was also one of the 10 most discussed measures to go before the legislature last year, according to the CalMatters Digital Democracy database. Lawmakers spent 4 hours and 39 minutes on the bill in public hearings in 2025 and heard testimony from 99 speakers.

Two consulting firms spent significant sums hiring lobbyists while fighting the bill, according to state records. They were Veterans Guardian, a North Carolina-based company that has spent $150,000 on California lobbyists over the past two years; and Veterans Benefit Guide, a Nevada-based company that spent $371,821 lobbying on Archuleta’s bill and a similar measure that failed in 2024.

These companies view laws like California’s as an existential threat. Both have founders with military backgrounds. Veterans Benefits Guide sued to block New Jersey law banning consulting fees on veterans claims and federal appeals court switched to the company’s side last year.

Charlotte Autolino, who organizes job fairs for veterans as chairwoman of the San Diego Veterans Employment Committee, criticized Newsom’s decision to sign the law. She spoke to CalMatters on behalf of the Veterans Benefits Administration.

“Veterans lose out,” she said. They lose the option. You’re taking away an option from them and putting all veterans in one box, and that to me is wrong.

But David West, a Marine Corps veteran who is a veterans service officer in Nevada County, praised Newsom. West was one of the main advocates of the new law.

“California veterans will know that when (Newsom) says he cares about everyone, he includes us; that he values ​​those 18- and 19-year-olds who raise their hands, write a blank check in the form of their life; to make sure they don’t write checks to access their benefits,” West said.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.