In a significant legal development, Texas Attorney General Ken Paxton has initiated a lawsuit against VA Claims Insider, an Austin-based company. The lawsuit, filed in Bexar County, accuses the company of engaging in “false, misleading, and deceptive acts and practices,” ensnaring thousands of veterans in Texas and beyond.
Paxton’s legal action seeks both damages and a permanent injunction against the company, alleging it misrepresents certain services as “free” and then binds veterans into contracts demanding exorbitant sums for services that are potentially illegal or unprovided.
The lawsuit details how VA Claims Insider requires veterans to pay six times the amount of any disability increase received after signing up with the company. Additionally, veterans have the option to terminate the contract at any time with a 30-day written notice, but the company still demands payment for any subsequent increases in disability benefits. In a case where the customer fails to notify an increase within one week, VA Claims Insider demands $5,000 in damages.
Moreover, there have been consumer complaints indicating that the company asked veterans to hand over their private information and VA account logins. The company’s advertisements also failed to disclose that it is not accredited by the VA, cannot provide claim preparation services, and had previously received a cease-and-desist letter from the VA for potential legal violations.
Paxton expressed disappointment over VA Claims Insider’s exploitation of veterans, stating his commitment to advocating for justice for Texas veterans. In response, VA Claims Insider denied any wrongdoing. Jeff Eller, a spokesperson for the company, disagreed with the lawsuit’s basis, emphasizing the company’s mission to serve veterans and expressing readiness to present their case in court.
Founded in 2017, VA Claims Insider has become a notable firm in an industry that assists military veterans with preparing and filing benefit claims, circumventing government accreditation and regulation. This lawsuit’s timing is noteworthy, as shortly after Paxton’s case was filed, a group of accredited claims agents filed their own class-action suit against VA Claims Insider. This suit alleges the perpetration of an “unfair and illegal scheme” that damages both the interests of accredited professionals and the veterans themselves.
Federal law requires that claims assistance be provided by accredited agents, who are trained, tested, overseen, and regulated by the U.S. Department of Veterans Affairs’ Office of General Counsel. These agents, along with lawyers and veteran service organizations, offer their services on a regulated fee scale, with some organizations providing free services. In contrast, unaccredited representatives are banned from preparing, presenting, or prosecuting claims, a regulation with its enforcement penalties removed in 2006, thereby allowing unaccredited entities like VA Claims Insider to emerge.
The proliferation of unaccredited actors has increased, particularly after the Honoring Our PACT Act, which expanded benefits for veterans disabled by military burn pits and other toxic exposures. Texas leads the nation in the number of PACT Act claims, highlighting the scale of this issue.
The Texas Tribune’s investigation into VA Claims Insider revealed numerous consumer complaints ranging from aggressive sales tactics to benefits fraud. These complaints date back as far as 2019, with veterans and government officials expressing concerns to Paxton’s office. Brian Reese, the founder of VA Claims Insider and an Air Force veteran, had sought guidance from the attorney general’s office, claiming to ensure the company’s operations were lawful.
In response to this situation, major veterans groups and the U.S. Department of Veterans Affairs, along with 44 state attorneys general, are lobbying Congress for the passage of the GUARD VA Benefits Act. This legislation seeks to reimpose fines and criminal penalties for unaccredited claims companies. The Veterans of Foreign War, leading this effort, has labeled some of the biggest unaccredited companies, including VA Claims Insider, as “claims sharks”.
Brian Reese has publicly rejected these characterizations, arguing that both unaccredited and accredited entities share the same mission of aiding veterans. He contends that the current conflict is detrimental to all, particularly veterans.
In summary, the legal actions against VA Claims Insider spotlight a critical issue in the veterans’ benefits landscape. It raises questions about the practices of unaccredited companies and the adequacy of existing regulations to protect veterans from potential exploitation. This ongoing legal battle underscores the need for vigilant oversight and stronger enforcement mechanisms to safeguard the rights and well-being of those who have served their country.