A company violated federal law for acting as a vetted agent and charging veterans fees to help file disability claims with the Department of Veterans Affairs, a North Carolina court ruled this week.
The federal circuit court ruling issued Wednesday found that Veterans Guardian VA Claim Consulting, LLC, also referred to as “Guardian” in court documents, ran afoul of federal law. The class action lawsuit brought by veterans also alleges that the company violated North Carolina laws around deceptive trade practices, but the court has not ruled on it yet.
“Federal law and the undisputed facts establish that Guardian acts as an agent on behalf of class members in the preparation of VA disability claims and in the presentation of VA disability claims. The undisputed facts show that Guardian is not accredited, as federal law requires of those who prepare or present claims on behalf of veterans, and that it charges and collects fees for those services in violation of federal law,” the judge ruled.
The ruling is one of the few court cases to look at the legality of companies — sometimes referred to as “claim sharks” — that offer services to file initial VA disability claims, or help veterans increase their VA rating, which can result in higher monthly compensation.
Andrew Tangen, president for the National Association of County Veteran Service Officers, an organization made up of local government employees that help veterans with their VA claims, said the case comes after advocates have been sounding the alarm about these companies for at least four years.
“This case represents the chief judge of a federal district court finding that the practices that have been passed off by claim sharks as being legitimate are actually not legitimate,” Tangen said.
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Under federal law, only attorneys or agents who are vetted and trained by VA are allowed to help veterans prepare and submit their claims. Accredited agents can only charge up to 20% of any back pay that the veteran receives. The North Carolina judge ruled that Guardian charged veterans five times the amount of the increase they received for their new VA compensation.
In one instance, a former Army intelligence analyst used Guardian to submit his first disability claim, according to court documents. He received a disability rating of 100% and monthly compensation of $4,272.80. The company charged him $21,360. He paid the company more than $19,000 and still has an outstanding balance of over $2,100.
The case also offers some insight into how these companies operate, with the court ruling that Guardians’ work goes beyond their marketed consulting services. According to court documents, the company collects veterans’ confidential and personal information, makes medical appointments for veterans, compiles evidence to support their claim, prepares stamped pre-addressed envelopes and tracks the claim packet delivery to the VA.
“These are the steps needed to present a claim to the VA. These are the acts that make Guardian an ‘agent’ in this statutory scheme,” the judge ruled.
Tangen said this case demonstrates the need for Congress to reinstate criminal penalties against claim sharks that were removed in 2006. The lack of criminal enforcement mechanisms, Tangen said, has “caused these companies to proliferate.”
The case comes amid similar lawsuits brought in Texas and Arizona. On Thursday, the Arizona Attorney General announced that veterans would receive restitution in a $2 million ruling against VetLink Solutions for violating consumer fraud laws. In January, a Texas court ruled that VA Claims Insider, LLC had to pay $6.8 million to veterans for deceptively charging fees six times the amount of their monthly compensation and posing as a legitimate veterans’ assistance organization.
“Veterans need to be made aware,” Tangen said. “Anyone who says that they are going to consult or help you by consulting on your claim and providing you with medical appointments and all you have to do is pay a fee and the fee is equal to five months of your increase, then they should stop contacting that company. Find a suitable nonprofit or Veteran Service Organization or government veteran service officer to help them navigate the VA.”
