For a decade, the Department of Veterans Affairs has pursued dozens of unaccredited consulting firms for allegedly charging disabled servicemembers illegal and exorbitant fees to help with disability claims — yet many continue operating despite repeated federal warnings, according to a new report.

The report says the VA has sent a total of 40 letters over the past ten years with a warning to these companies — often referred to by critics as “claims sharks” — to review their practices and “immediately cease” any illegal activities. The report comes following a new investigation by The War Horse and NPR which obtained the cease and desist letters through a Freedom of Information Act request. 

The findings show that at least 29 of the companies are still in operation as recently as last month despite being warned that they may be engaged in unlawful activity. Some of the bigger companies, which include VA Claims Insider, Trajector Inc., and Veterans Guardian VA Claims Consulting, received multiple letters as added hundreds of employees and collectively spent millions on lobbying efforts.

The number of letters shot up in 2024 during the Biden administration, when the VA made a growing effort to combat fraud after a Federal Trade Commission report revealed that veterans were swindled out of $419 million the previous year.

Former employees of Trajector told NPR that the company, which started with an earnest mission to help veterans, eventually became intent on maximizing its profits  through aggressive debt collection. The company’s main method of collection is allegedly through a computerized robo-dialer system named “CallBot” that bombards a VA phone hotline meant for veterans. 

Since Trajector is not VA-accredited and cannot access veterans’ disability information directly, it uses CallBot as a side-door to obtain payment details by regularly entering Social Security numbers and birthdates from its tens of thousands of clients into the hotline. Upon detecting an increase in a veteran’s monthly disability payment, the company automatically sends a bill, sometimes for up to $20,000, and immediately begins collection calls.

“I think that they took advantage of me and… accessed the VA database to find out if I had a claim so they could make $4,500 from a guy who spent five and a half years in the Army and two tours in Afghanistan,” one veteran named Dustin, who declined to give his last name, told NPR. After refusing to pay the bill, he was told by Trajector that he could not cancel the signed contract.

The process for veterans to secure financial benefits from the VA — based on a disability rating between zero and 100 percent — is often long and difficult. Consulting companies offer to expedite this for cash, like outsourcing tax preparation. However, these firms frequently charge veterans fees amounting to ten times as much as typical tax help. Some demand a single payment that is five times the veteran’s disability rate increase — potentially more than $20,000. 

Most companies defend this by claiming they only provide advice on how to file, and do not actually submit the veterans’ paperwork, thus avoiding legal violations.

Veterans are not required to pay for help with their disability claims and can even gain free support from organizations like The American Legion and Veterans of Foreign Wars.

The warning letters appear to be having little impact, due to a bill passed in congress that stripped penalties from the law.

“VA is not a law enforcement agency but is fully committed to preventing bad actors from taking advantage of veterans,” VA press secretary Pete Kasperowicz told The War Horse and NPR, adding that when signs of fraud are spotted that the department works with the proper authorities.

“But we also want to make sure veterans have choices, particularly if they aren’t happy with whatever options might be available to them for free,” Mr. Kasperowicz said.