A report issued Oct. 3, 2019 by the Government Accountability Office (GAO) says that the Department of Veterans Affairs needs to do more to protect veterans, especially older ones, from fraud. It also said the VA needs to work with other government agencies to help track and prosecute those who prey on the most vulnerable veterans.
The report also noted that the VA, as a steward for public funds, has a responsibility to both veterans and taxpayers to work in the best interest of both groups.
The GAO is an independent, nonpartisan agency that works for Congress. It examines how taxpayer dollars are spent and reports its findings to Congress and government agencies in an attempt to save taxpayer dollars.
Older Disabled Veterans at Biggest Risk
As directed by the Consolidated Appropriations Act of 2017 (Public Law 115-131), the GAO examined pension and aid & attendance (A&A) payments made to veterans and survivors in fiscal 2018. During that time, the VA paid a total of $3.2 billion to approximately 232,000 beneficiaries, averaging about $14,000 per person.
A veteran may be eligible for A&A when:
- They need the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting themselves from the hazards of their daily environment.
- They are bedridden.
- They are a patient in a nursing home due to mental or physical incapacity.
- They are blind, or have corrected vision of 5/200 or less, in both eyes, or concentric contraction of the visual field to 5 degrees or less.
The average age of veterans and family members receiving A&A benefits is 81. So, besides having little or no income, as well as a severe disability, this group of beneficiaries also is among the most vulnerable to financial exploitation as older adults.
Older adults, in general, are more at risk of financial exploitation because they may have diminished capacity to make financial decisions, and may be targeted because they receive ongoing benefits payments.
How Scammers Target Veterans
Examples of fraud against veterans listed in the report include:
Being charged fees to apply for VA benefits
Federal law prohibits individuals from charging veterans fees to help them apply for benefits. The report found some attorneys label their fees as things like a "pre-filing consultation fee" to get around this.
Being charged unreasonable fees for legal services
A 2018 opinion of the Kansas Supreme Court described how a veteran and their spouse paid unreasonable fees for legal services related to applying for benefits. The couple, who were in their late 80s and had nearly $500,000 in assets, entered into an agreement with an attorney for estate and long-term care planning. The couple was charged about $31,000 in fees that should have been closer to $5,000.
Pension advance loans
In 2018, the Virginia Attorney General busted a company and charged it over $50 million in debt relief and civil penalties for making high-interest loans to more than 1,000 veterans and retirees.
According to the Virginia Attorney General's press release, the suit had claimed that the company disguised its illegal, high-interest loans as "pension sales" that could provide pension holders with a quick lump sum of cash.
Charging too much for in-home care
Some in-home care providers know how much the VA will provide veterans for in-home A&A care and charge veterans more than they charge others since they know the VA will pay the higher amount.
Having payments sent to another's bank account.
The application for pension benefits asks claimants to provide their direct deposit information, either on the form or by providing a voided check. But if the applicant doesn't attach a voided check, the VA will process the application normally. This can result in funds being sent to the scammer's bank account.
The VA says it is the veteran's responsibility to provide correct information, arguing that many veterans don't have checking accounts and get their benefits put onto a debit card. However, the Social Security Administration verifies bank account information by requesting documents such as a personal check, an account statement or a passbook.
VA's Action on GAO's Findings
The report made four recommendations of steps the VA can take to help prevent fraud:
- Share information with other government agencies.
- Place more warnings on applications and its website about the potential for fraud.
- Train staff to spot fraud.
- Examine ways to prevent direct deposit fraud.
While the VA agreed in principle to sharing information with other agencies about fraud, it noted that there are hurdles when dealing with different enforcement agencies and regulations. It did agree to implement all the other recommendations.
For its part, the VA says that, while many of these schemes may not be in the best interest of veterans, they are not against the law. VA officials also said that as long as beneficiaries are competent, they can spend their benefits as they see fit.
The VA also deferred addressing financial exploitation issues to its Inspector General's office, saying there is limited incentive to track issues when they involve actions against veterans that do not violate laws or VA rules.
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