Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D.N.C.: Unaccredited VA disability claim preparation deemed unfair practice under North Carolina consumer protection law, (Aug 5, 2026)

By Justin Marcus Smith, J.D.

The consumers’ voluntary payment of claim preparation fees was ineffective as an affirmative defense to the extent it ran contrary to the purpose of the consumer protection laws.

North Carolina law applied to consumer protection claims brought against Veterans Guardian VA Claim Consulting, an unaccredited preparer of disability claims for submission to the Department of Veterans Affairs, held the federal district court in Greensboro, North Carolina. The claim preparation services contract was closely intertwined with the plaintiffs’ unfair trade practices claims. Taken together, the consultancy’s conduct in preparing and charging fees for VA disability claims and attempt to avoid VA scrutiny violated federal law and was therefore unfair, legally prohibited, and predatory. Accordingly, the consultancy’s conduct amounted to unfair trade practices. Intent was indisputable, and it was also undisputed that Guardian’s actions affected the exchange of money in commerce. The court accordingly granted the plaintiffs’ motion for summary judgment as to Guardian liability on North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) claims. The court denied Guardian’s corresponding motion for summary judgment on the UDTPA claims. In contrast, the court granted limited summary judgment to Guardian on one aspect of the plaintiffs’ North Carolina Debt Collection Act (NCDCA) claim insofar as there was no evidence of a debt collection legal proceeding. The court accordingly granted Guardian summary judgment; however, remaining aspects of the plaintiffs’ NCDCA claim will go to trial. Guardian’s voluntary payment affirmative defense did not apply to the UDTPA claims or the NCDCA claim mainly because such defense ran contrary to the legislature’s purpose in enacting the consumer protection statutes (Ford v. Veterans Guardian VA Claim Consulting, LLC, No. 1:23-cv-00756-CCE-LPA (M.D.N.C. Aug. 3, 2026)).

Background. Plaintiffs and class members allegedly signed contracts with Veterans Guardian VA Claim Consulting (Guardian), a putative Veterans Affairs (VA) disability claim preparer, and used Guardian services to apply for first time VA benefits (initial claims) and for increases in VA benefits (non-initial claims). Guardian works on a contingent basis and charges a fee if and when clients receive an initial VA benefit or an increase in their existing VA benefit. Clients received either a disability benefit amount for the first time or an increase in their current VA disability benefit amount. The plaintiffs and class members paid at least part of the fee amount Guardian invoiced. The difficulty was that Guardian was not accredited by the VA as required by federal law. Guardian acknowledged it could not charge fees for preparing initial VA disability claims if it were accredited, because federal statute, 38 U.S.C. § 5904(c)(1), prohibits such fees. Any fee Guardian charged on initial claims was more than accredited agents could charge. Fees for preparing non-initial claims were subject to VA reasonableness review, but Guardian omitted its name and involvement, and instructed clients not to mention it, so VA did not review. The regulations provide that fees that exceed one-third of any past-due benefits are presumptively unreasonable.

The plaintiffs brought a class action contending that Guardian’s federal law violations constituted violations of the UDTPA and NCDCA.

At this stage of the proceedings, both sides moved for summary judgment. The plaintiffs moved for summary judgment on the issue of whether Guardian was an agent and on UDTPA liability. All plaintiff claims on behalf of the three certified classes depended on the premise that Guardian violates federal law by preparing and presenting disability claims to the VA on behalf of veterans without being accredited to do that. The plaintiffs had already established that predicate requirement.

Guardian moved for summary judgment on the NCDCA claim on the issue of whether it was an agent, on the UDTPA claims, on a narrow aspect of the NCDCA claim, and on its affirmative defense of the voluntary payment doctrine. The court had also already resolved questions arising from enactment of a new North Carolina law pertinent to fees for services like Guardians. The court previously granted Guardian’s motion as to claims arising after September 30, 2025.

Choice-of-law. The court denied Guardian’s motion for summary judgment as to its argument that the UDTPA did not apply to the out-of-state plaintiffs and class members. The instant court favored case-by-case analysis, and here, it concluded that the various considerations called for application of North Carolina law. The plaintiffs focused their UDTPA claims on alleged billing injuries that occurred both wherever the Guardian clients were located and in North Carolina where Guardian acted and received payment.

Guardian chose North Carolina law for a contract dispute with its clients, and this case was certainly a contract dispute, not a tort dispute as Guardian suggested. There was no doubt that North Carolina, Guardian’s domicile, was the place of conduct that caused the alleged injury and where it received payment.

Neither party specifically addressed the choice-of-law issue with respect to the NCDCA claim. The arguments they made about choice-of-law did not distinguish the NCDCA claim from the UDTPA claims. However, the court found the alleged facts were in common, so the analysis would be the same, and the court held North Carolina law would apply.

UTDPA liability. The court held that Guardian’s violations of federal law were per se unfair trade practice violations. Whether Guardian’s acts were unfair trade practices was a question of law for the court, while whether such acts affected commerce or proximately caused injury were questions of fact.

The court analyzed that the essence of an unfair trade practice is that it offends established public policy. Violation of a consumer protection statute may be an unfair and deceptive practice, even if the statute itself does not provide a private right of action, but that is not always so.

The applicable federal statute, 38 U.S.C. § 5901(b), proscribed unfair and deceptive conduct where it discussed accreditation requirements for VA claims agents and warned against “predatory practices” that occur when unaccredited agents violate those requirements. There was no dispute that Guardian engaged in such conduct by acting as unaccredited agent and charged fees. Federal law prohibited the fees as to initial claims and also addressed an attempt to avoid required VA oversight as to non-initial claims. Guardian conduct continued after the VA issued cease-and-desist letters. Taken together, Guardian’s conduct was unfair, legally prohibited, and predatory. Accordingly, Guardian conduct amounted to unfair trade practices.

Guardian argued § 5901 did not specifically define and proscribe unfair or deceptive conduct to establish a per se UDTPA violation, but the statute required disability claim agents to be accredited. Per the statute, Guardian’s practice of acting as an unaccredited agent was predatory. The court footnoted that there could be no per se UDTPA violation based on a violation of a federal law to the extent North Carolina began regulating legal area after October 1, 2025. The court already dismissed claims after that date on other grounds.

It was also undisputed that the fees Guardian charged were often larger than what the VA would have approved. Moreover, Guardian advised its clients not to mention its assistance to them to avoid VA reasonableness oversight in a way that bordered on subterfuge or was otherwise unfair. Guardian knew it was not accredited, so intent was not in doubt. It was also undisputed that Guardian’s actions affected the exchange of money in commerce. The court accordingly granted the plaintiffs’ motion for summary judgment for agency and liability on the UTDPA claims and, correspondingly, denied Guardian’s motion.

NCDCA claim. As for the NCDCA claim, the plaintiffs did not present evidence of a false statement in a collection legal proceeding. They also failed to cite any authority for their proposition that the statute did not require a legal proceeding. The court made a narrow holding that the NCDCA requires a legal proceeding. The court accordingly granted Guardian summary judgment on this aspect of the plaintiff’s NCDCA claim. Remaining NCDCA claims will go to trial.

Voluntary payment. Guardian did not cite, and the court did not find a North Carolina case dismissing a UDTPA or NCDCA claim based on the voluntary payment affirmative defense. As the court had already noted, UDTPA and NCDCA claims differ from contract and unjust enrichment claims. In addition, the voluntary payment defense ran contrary to the legislative purpose in enacting statutes that address unfair or deceptive practices, so it could not bar the plaintiffs’ claims. Guardian also failed to show that the plaintiffs had full knowledge of all facts relative to making their payment. In addition, although the plaintiffs knew Guardian was not accredited, the consulting service agreement inaccurately stated that all services provided comported with applicable federal law and regulations. The court footnoted that it doubted whether even Guardian would assert the voluntary payment doctrine defense against a per se UDTPA violation under new Military Veteran Support Act provisions.

The Case is No. 1:23-cv-00756-CCE-LPA.

Judge: Eagles, C.

Attorneys: Brian Warwick (Varnell and Warwick PA) for Jennifer Ford. Dustin Timothy Greene (Kilpatrick Townsend & Stockton, LLP) for Veterans Guardian Va Claim Consulting, LLC.

Companies: Veterans Guardian Va Claim Consulting, LLC

Cases: StateUnfairTradePractices NorthCarolinaNews