Texas Attorney General Ken Paxton has filed a lawsuit seeking damages and, ultimately, a permanent injunction against the Austin-based company VA Claims Insider, alleging it engages in 鈥渇alse, misleading, and deceptive acts and practices鈥� that have ensnared thousands of veterans in the Lone Star state, and beyond.
Paxton鈥檚 complaint, filed in district court in Bexar County, specifically charges that VA Claims Insider inaccurately promotes certain services as 鈥渇ree鈥� before locking veterans into contracts that demand exorbitant sums 鈥� including for potentially illegal services, or assistance it doesn鈥檛 provide. The company requires that veterans pay six times the amount of any disability increase they receive after signing up with VACI, the suit said.
鈥淲hile veterans can terminate the contract at any time with a 30-day written notice, VACI still demands payment for any subsequent increases in disability benefits or $5,000 in damages if the customer fails to notify it of an increase within one week,鈥� the attorney general鈥檚 office said in a statement. 鈥淔urther, consumer complaints reflect that the company specifically requested veterans to turn over their private information and VA account logins. Additionally, the company鈥檚 advertisements failed to disclose to potential customers that VACI is not accredited by the VA, cannot provide claim preparation services, and that the VA previously sent a cease-and-desist letter to VACI for potentially violating the law.鈥�
The attorney general鈥檚 charges echo allegations surfaced in an The Texas Tribune published in July.
[]
鈥淚t is deeply disappointing that this business took advantage of men and women who have given so much to our country,鈥� Paxton said in a press release announcing his . 鈥淚鈥檓 proud to advocate for justice for our Texas veterans at every opportunity.鈥�
The company denied wrongdoing.
鈥淲e respectfully disagree with the basis of the lawsuit filed by the Texas attorney general鈥檚 office,鈥� said Jeff Eller, a VA Claims Insider spokesperson. 鈥淔ounded by a veteran to serve veterans, VA Claims Insider is a mission-driven organization and stands behind that mission. We welcome the opportunity to present our case in court.鈥�
Founded in 2017, VA Claims Insider has become a particularly prominent and profitable firm in a burgeoning industry of companies that have sidestepped government accreditation and regulation as they seek to assist military veterans with the onerous work of preparing and filing benefits claims.
Days after Paxton鈥檚 case was filed, a group of accredited claims agents filed their own against VA Claims Insider, seeking damages for perpetrating an allegedly 鈥渦nfair and illegal scheme, which not only harms the business interests of properly accredited attorneys and agents but also hurts our veterans.鈥� (In response to the class-action case, Eller provided a statement that was nearly identical to the one issued in response to Paxton鈥檚 suit.)
Federal law mandates that claims assistance is undertaken by accredited agents, who are trained, tested, overseen, and, when appropriate, punished by the U.S. Department of Veterans Affairs鈥� Office of General Counsel. Traditionally, the federal office offers : agents, lawyers and veteran service organizations like the and the . The lawyers and agents charge fees on a tightly regulated scale. The service organizations provide their services for free, as does the , which also employs accredited agents.
Unaccredited representatives are explicitly banned from 鈥減reparing, presenting or prosecuting鈥� claims, but all penalties for breaking this law were removed in 2006, setting the stage for unaccredited actors to flourish. While VA Claims Insider鈥檚 website and written materials include disclaimers that the company doesn鈥檛 engage in this work, Paxton鈥檚 suit deems such statements 鈥渋nconsistent鈥� with the services the company advertises.
Over the last year or so, unaccredited actors have proliferated thanks to the Honoring Our PACT Act, passed by Congress to expand benefits for millions of veterans disabled by and other toxic exposures dating back to the Vietnam War. Since the law was signed last August, than one million veterans have filed a claim. As of late July, Texas in number of PACT Act claims.
The Tribune鈥檚 investigation into VA Claims Insider detailed a slew of consumer complaints against the company, alleging everything from 鈥渟limy car sales tactics鈥� to benefits fraud. The story also revealed that veterans and government officials had complained to Paxton鈥檚 office about VA Claims Insider dating as far as 2019. It also showed that company founder Brian Reese, an Air Force veteran, contacted the attorney general鈥檚 office for guidance, after which he publicly asserted online that he had spoken with lawyers there to 鈥渕ake sure that everything we鈥檙e doing is above board.鈥�
Major veterans groups, the U.S. Department of Veterans Affairs, and 44 state are now lobbying in Congress for passage of , which would reimpose fines and criminal penalties for unaccredited claims companies. Leading this charge is the Veterans of Foreign War, which recently some of the biggest unaccredited companies, including VA Claims Insider, as 鈥渃laims sharks.鈥�
Reese rejected this characterization in a video, insisting that unaccredited and accredited actors share the same mission of helping veterans.
鈥淚 think this infighting 鈥� this 鈥榰s versus them鈥� mentality 鈥� is hurting everybody,鈥� he said. 鈥淚t鈥檚 hurting the veterans and it鈥檚 unproductive.鈥�
Jasper Craven, an independent investigative reporter covering military and veterans鈥� issues for outlets including The New York Times Magazine, the Intercept, the Atlantic and the New Republic, is a co-author of This year he was a finalist for a Livingston Award for national reporting for .
Disclosure: Jeff Eller, a former Texas Tribune board member, and the Texas Veterans Commission have been financial supporters of the Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune鈥檚 journalism. Find a complete list of them .
This article originally appeared in at .
