California prohibits billing for assistance in VA claims

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A booming industry that charges veterans to help them earn benefits for their years of service must shut down or drastically change its business model in California by the end of the year, under a new law the governor Gavin Newsom signed on Tuesday.

The law prohibits unaccredited private companies from charging veterans for assistance with their claims to the Department of Veterans Affairs (VA).

Technically, it was already illegal under federal law to charge veterans for this work, but 20 years ago Congress 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 passing this law, we’re making sure veterans and service members keep more money and don’t fill the coffers of predators. 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 boost veterans receive after using their services. CalMatters, for example, interviewed a Vietnam War veteran in September who he was billed $5,500 after receiving benefits that would pay him $1,100 a month.

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

“We owe it to our veterans to support 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, promoted the legislation. “This isn’t about politics; this is about doing the right thing. Making millions of dollars off our veterans is wrong. They’ve earned their benefits. They deserve them.”

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

California is among 11 states that have taken steps to shut the companies out of business, while another group of mostly Republican-led states have legalized them, according to reports from the veteran news organization The war horse.

This division somewhat reflects the different perspectives that veterans themselves have about the companies. The bill had overwhelming support from organizations that help veterans file claims for free benefits, such as the American Legion and Veterans of Foreign Wars, as well as Democratic Party leaders, including former Pres. of the House of Representatives Nancy Pelosi, from San Francisco.

But the Department of Veterans Affairs (VA) application process. It can take months and create uncertainty among the candidates. Several app consulting companies claim to have helped tens of thousands of veterans across the country and 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 them, ‘Veteran, you know what? I don’t know if you’re too stupid or too vulnerable or if your judgment is so bad that you can’t choose for yourself,'” Sen. Tom Umberg, a Democrat and former Army colonel, said during a debate on the measure last month.

The new law was so controversial to lawmakers that nine of the 40 senators abstained when it passed the chamber last month, which counts as a vote against, but avoid offending the electorate which the legislator wants to preserve.

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

Two litigation consulting firms have spent significant sums hiring lobbyists to fight the bill, according to state records. They are Veterans Guardian, a North Carolina-based company that has invested $150,000 in California lobbyists over the past two years; and Veterans Benefit Guide, a Nevada-based company that spent $371,821 lobbying for 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 for veterans claims and Federal Court of Appeals ruled in favor of the company last year.

“This has been the most difficult bill I’ve had to work on since I’ve been in the Legislature,” said Assemblywoman Pilar Schiavo, MD, Santa Clarita, who sponsored the bill. “We know why because there was a lot of money on the other side.”

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

“Veterans lose out,” he said. “They’re losing the option. They’re taking away an option and putting all veterans in the same category, and that, I think, is wrong.”

But David West, a Navy veteran and Nevada County Veterans Affairs officer, praised Newsom. West was one of the main promoters 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 shape of their lives; and then make sure they don’t write checks to access their benefits,” West said.