Gov. Gavin Newsom signs law barring unaccredited companies from charging veterans for disability claim assistance, intensifying a state-by-state showdown with multimillion-dollar consulting firms.
In a move reverberating across the veterans’ advocacy and defense policy community, Gavin Newsom has signed sweeping legislation aimed at eliminating so-called “claim shark” companies operating in California’s vast veteran population.
The new law prohibits unaccredited private firms from charging veterans fees to assist with Department of Veterans Affairs disability claims — a practice critics argue exploits service members navigating one of the federal government’s most complex benefits systems.
The legislation effectively forces unaccredited claims consulting firms to overhaul their business models or cease operations in the state by year’s end.
Closing a Federal Enforcement Gap
Under federal statute, charging veterans for VA claims assistance has long been restricted. However, Congress removed criminal penalties for violations roughly two decades ago, creating what critics describe as an enforcement vacuum. In that space, a multimillion-dollar private consulting industry emerged, marketing expedited claims support and “maximizing” disability ratings.
Newsom framed the California measure as a direct response to that loophole.
“We owe our veteran community a debt of gratitude,” Newsom said in a written statement. “We are ensuring veterans and service members get to keep more money in their pockets and not line the coffers of predatory actors.”
The law positions California among 11 states that have enacted similar prohibitions targeting fee-based, unaccredited claims consultants.
Veterans Divided: Protection or Restriction?
Support for the bill came from major veterans’ service organizations (VSOs), including American Legion and Veterans of Foreign Wars, both of which provide free, accredited assistance to veterans filing claims.
Advocates argue that some consulting firms have charged thousands of dollars — in certain cases five times a veteran’s monthly disability award — leaving former service members saddled with bills exceeding $5,000 to $10,000.
State Sen. Bob Archuleta, an Army veteran who co-authored the bill, described it as a nonpartisan defense of veterans’ earned benefits.
Yet opposition was unusually bipartisan and vocal. Critics, including retired Army colonel and State Sen. Tom Umberg, argued the legislation limits veterans’ autonomy by eliminating private-sector options in a system widely criticized for long processing times and bureaucratic complexity.
High-Dollar Lobbying Fight
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| California State Sen. Tom Umberg, A Democrat and former Army Colonel, opposed the legislation limiting private disability consulting businesses. (Office of Sen. Tom Umberg) |
Two prominent firms — Veterans Benefit Guide and Veterans Guardian — mounted an aggressive lobbying campaign against the bill, reportedly spending more than $500,000 over two years.
The policy fight is unfolding nationally. In 2025, a federal appeals court sided with Veterans Benefit Guide in a lawsuit challenging a similar law in New Jersey, adding legal uncertainty to state-level enforcement efforts.
The Broader Defense and Policy Implications
California’s action highlights a larger debate within defense policy circles: how to safeguard veterans from exploitation without constraining their access to assistance in navigating the VA system.
But supporters of the new law say the issue is straightforward: veterans should not have to pay large sums to access benefits they earned through military service.
For policymakers in Washington, the California statute adds momentum to renewed congressional discussions over whether to restore federal penalties, codify national regulations, or allow continued state-level experimentation.
As more states choose sides, the legal and political fight over the veteran claims industry is far from settled.
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-- By James W. Thomas
© 2026 JWT Communications. All rights reserved. This article may not be republished, rebroadcast, rewritten, or distributed in any form without written permission.
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