California Passes Law Severely Limiting Veteran ‘Claim Shark’ Companies

For some veterans, filing a claim with the Department of Veterans Affairs can often be a confusing, frustrating process. 

To streamline this work, many businesses have popped up in recent years claiming to help veterans, only to take advantage, leaving them with thousands of dollars in expenses and not much help. 

On Tuesday, California Gov. Gavin Newsom signed legislation forcing “claim shark” companies to either systematically change their philosophies by the end of the year or no longer operate, according to CalMatters. Under the law, unaccredited private firms can no longer charge fees to assist veterans in filing claims. 

Based on federal law, charging veterans for that aid was already illegal, but two decades ago, Congress eliminated criminal penalties for violations, opening the door for private businesses to pursue veterans with offers of fast, efficient service to file claims and maximize benefits. 

“We owe our veteran community a debt of gratitude — for their years of service and sacrifice,” Newsom said in a written statement. “By signing this bill into law, we are ensuring veterans and service members get to keep more money in their pockets and not line the coffers of predatory actors. We are closing this federal fraud loophole for good.”

Sharks or Lifelines?  

Through the years, some of these companies became known as “claim sharks,” charging five times the amount a veteran could obtain through monthly VA disability payments. 

Last fall, a Vietnam War veteran told CalMatters he was shocked when he received a bill for $5,500 for claim services, only to receive $1,100 per month from the VA. Certain companies charged more depending on a veteran’s disability rating, with some fees exceeding $10,000. 

California, with a large veteran population, had seen enough. State Sen. Bob Archuleta, from Norwalk, California, helped propose the bill. As an Army veteran, he’s glad to see it cross the finish line and become law. 

“We owe it to our veterans to stand with them and to protect them from being taken advantage of while navigating the benefits they’ve earned,” Archuleta said. “This is not about politics; it’s about doing what’s right. Making millions of dollars on the back of our veterans is wrong. They’ve earned their benefits. They deserve their benefits.”

Nationally, states have grappled with how to deal with these companies, debating whether they’re predators or helpers. Congress has debated whether to ban claim sharks altogether, let them keep functioning in their current state, or pass measures to regulate them.  

California is one of 11 states to pass laws essentially terminating these businesses, but some states, according to The War Horse, have legalized them. 

Mixed Reaction Among Veterans 

Veterans have contrasting beliefs regarding companies that help with processing claims.  

California’s bill was heavily supported by veterans’ service organizations like the American Legion and Veterans of Foreign Wars, that assist veterans in filing claims for free. 

However, filing a claim and receiving benefits can take months or even years, leaving veterans angry and perplexed. Some businesses claiming to help veterans with this puzzle justify their practices by saying they’ve helped tens of thousands of veterans with fully staffed operations.    

That prompted some legislators in California to vote against the bill, including Democrats who served in the military. 

“We’re going to say to you, ‘Veteran, you know what, I don’t know if you are too stupid or too vulnerable or your judgment is so poor you can’t choose yourself,’” said Sen. Tom Umberg, (D-Santa Ana), a retired Army colonel. 

The bill narrowly passed the California legislature and was one of the most heavily debated bills moving through the state’s chambers last year, according to CalMatters. Legislators haggled over the bill for more than four and a half hours during public hearings and brought in testimony from nearly 100 speakers. 

A pair of claims consulting businesses, Veterans Benefit Guide and Veterans Guardian, pushed hard against the bill, spending more than half a million dollars on lobbyists to fight it the past two years. New Jersey passed a similar law and Veterans Benefit Guide sued the state, winning its lawsuit through a federal appeals court in 2025.  

In California, Assemblymember Pilar Schiavo (D-Santa Clarita), said the bill was the hardest she’s worked on since being in the Legislature. 

“We know why that is, because there was so much money on the other side,” Schiavo said. 

Some critics of the new law, however, say that ultimately veterans lose out. Charlotte Autolino, who serves as chair of San Diego’s Veterans Employment Committee, helps veterans find work through job fairs. Speaking on behalf of Veterans Benefit Guide, Autolino doesn’t believe in limiting choices for veterans. 

“They lose the option,” Autolino said. “You’re taking an option away from them and you’re putting all of the veterans into one box, and that to me is wrong.”

David West doesn’t see it that way. The former Marine and Nevada County veterans service officer praised Newsom in standing up for veterans and current service members who will have to navigate the VA disability system in the future. 

“The veterans of California are going to know that when (Newsom) says he’s taking care of everybody, he’s including us; that he values those 18- and 19-year-olds who are raising their hands, writing a blank check in the form of their lives; to then ensure that they aren’t writing checks to access their benefits,” West said.