New California law blocks 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 will protect veterans from costly and confusing fees, while critics argue it may 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, rules can feel unclear, and the process often stretches on for months or longer. In recent years, private companies stepped in offering assistance, sometimes promising faster results or higher disability ratings. Critics say many of these businesses charged high fees while providing little meaningful help.
Under the new law, private companies that are not accredited by the VA are banned from charging veterans to assist with filing disability claims. Federal law already prohibited such fees, but criminal penalties were removed years ago, allowing companies to operate with little enforcement. California’s law restores penalties at the state level, making the practice illegal within its borders.
Supporters point to reports of veterans being billed thousands of dollars for basic assistance, sometimes equal to several months of disability payments. In some cases, fees increased depending on how high a disability rating a veteran received. Lawmakers and advocates argue this created a system where companies profited directly from veterans’ injuries.
State officials said California’s large veteran population made action necessary. Lawmakers backing the bill described it as an issue of fairness, arguing that veterans should not have to pay steep fees to access benefits they already earned through service.
Veterans’ service organizations strongly supported the law. Groups such as 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 add confusion while draining money from veterans who may already be struggling financially.
Opposition to the law was vocal. Some veterans and lawmakers argued that it limits choice rather than fixing the underlying problems with the VA system. They said the disability claims process is slow and frustrating, and that some private companies did offer useful guidance. A handful of legislators with military backgrounds voted against the bill, saying veterans should be trusted to decide how they seek assistance.
The bill passed narrowly after hours of testimony from veterans, advocates, and business representatives. Companies affected by the law spent heavily on lobbying efforts to stop or weaken it, arguing that banning fees could leave some veterans without support.
Supporters countered that the law is about protection, not speed. They say veterans are often approached during vulnerable moments, including periods of injury, financial stress, or mental health challenges. Banning fees, they argue, 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 remain common complaints. However, they argue that allowing high-fee businesses to operate does not fix those problems and instead shifts the burden onto veterans.
The governor defended the law as a way to ensure veterans keep more of their benefits. He said the measure closes a loophole that allowed 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 outreach. They stress the importance of educating veterans about free resources and ensuring support throughout the claims process.
Sources:
California Passes Law Severely Limiting Veteran ‘Claim Shark’ Companies
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