MONTGOMERY, Ala. – Members of the Legislative Committee for the Alabama Department of Veterans Affairs adopted a resolution Wednesday in an effort to combat the exploitation of veterans by for-profit entities.
Sometimes referred to as ‘claim sharks,’ these for-profit companies or individuals offer consulting services to help veterans claim their benefits, often charging high fees and contracts that see veterans forfeit a percentage of their benefits in perpetuity.
The resolution the committee adopted, which Committee Vice Chair Scott Gedling called a “grassroots effort to stop that predatory practice,” would instruct board members of the ADVA to engage with state lawmakers on a bill to prohibit the practice of charging veterans fees to claim their benefits.
“Personally, I think it’s the right thing to do,” Gedling said.
The resolution was adopted unanimously, with committee members sharing anecdotes of how frequently such instances occurred in their own communities.
“I see it in Mobile every day, they are being taken advantage of,” said Matt Gaff, committee and ADVA Board member.
“What the lawyers will do, they will drag that claim out for six, seven, eight years; that way, they get a bigger part of that back pay. I watched it happen two months ago, a veteran paid $28,000 to have a claim done by a lawyer, about 30% of his back pay.”
It is illegal under federal law for unaccredited entities – of which many ‘claim sharks’ are – to charge veterans fees for assistance with filing benefits. However, a 2006 change to enforcement mechanisms within VA regulations removed criminal penalties for violations of the law, leaving it largely unenforced.
An effort to reintroduce criminal penalties for unaccredited entities charging veterans fees to file benefits was introduced last year in Congress – co-sponsored by Alabama’s own U.S. House Reps. Jerry Carl, Dale Strong and Terri Sewell – but failed to pass.
New Jersey became the first state to pass its own law banning the practice last year. Several other states have made efforts toward passing similar laws, though with fierce opposition from special interests groups representing those who would stand to benefit from a lack of criminal penalties for charging veterans fees.
“I can probably name 20 veterans just in my sphere of influence that paid somebody to claim their benefits,” Gedling told Alabama Daily News, when asked how prevalent the practice was in Alabama.
Gedling also said he anticipated strong pushback from those same special interests were a state lawmaker to carry the ADVA’s proposed bill.
“They’ll push back, and that industry unfortunately has lobbyist too,” he told ADN. “We’ve got grassroots, they’ve got lobbyists, but we will pursue that kind of legislation and try and get that for the benefit of veterans in the state of Alabama.”
Exploitation of veterans has exploded in recent years after the passage of the 2022 PACT Act, which expanded VA benefits to millions of new veterans across the country.
The ADVA has accredited service officers in 60 of Alabama’s 67 counties who help veterans file and claim their benefits free of charge, Gedling said.