Veterans Warned About High Fees from Unaccredited Claims Assistance Firms

Lamont, Calif. — When Adan Montalvo, 72, was approved for $1,102 per month in Veterans Affairs (VA) disability benefits, he expected financial relief. Instead, he found himself facing a bill of $5,500 — equivalent to five months of benefits — from a private company that helped him file his claim.

“They wanted to collect all of it, and I told them, ‘how am I going to give you money I don’t have?’” Montalvo told CalMatters. He agreed to a payment plan, but the total cost, including interest, amounted to more than half his monthly disability check.

Federal law allows only VA-accredited representatives — including veterans service organizations, claims agents, or attorneys — to assist with VA claims and charge fees. However, representatives cannot charge fees for helping veterans with an initial claim; fees are only permitted for services rendered after the initial VA decision. Unauthorized entities that charge veterans for filing claims are violating federal regulations, though enforcement is limited and no criminal penalties exist at the federal level.

Several states, including Maine, New Jersey, and New York, have recently passed laws prohibiting for-profit claims consultants, while similar legislation is pending in 17 other states.

It is unclear whether Montalvo was charged for assistance with his initial claim, and the company that assisted him does not appear to be accredited.

Veterans who believe they were overcharged or misled have options:

• Verify representation: The VA maintains a list of accredited representatives, including service organizations, claims agents, and attorneys.

• Check appointment forms: VA forms 21-22 or 21-22A must be filed to officially appoint a representative. Only one-time exceptions exist for non-accredited representatives, who must provide services free of charge.

• Report misconduct: Complaints can be filed with the VA, the Federal Trade Commission, or a state attorney general if an entity misrepresents its accreditation or affiliation with the VA.

According to the Consumer Financial Protection Bureau (CFPB), fees paid directly from past-due benefits are generally considered reasonable up to 20%, while fees paid outside of benefits may be scrutinized if they exceed 33.3% of past-due benefits. Veterans are urged to exercise caution and ensure any organization assisting with VA claims is properly accredited to avoid financial exploitation.