Texas Attorney General Ken Paxton filed a lawsuit Friday against CBR Systems Inc. for allegedly deceiving new parents about the benefits of private cord blood banking.
The suit claims CBR exploits parental fears to sell largely worthless services, diverting potentially life-saving donations from public banks where they’re needed most. CBR charges parents steep prices to store their newborns’ umbilical cord stem cells, claiming the cells can treat over 80 serious medical conditions. But according to the lawsuit, the odds that a child will ever use their own cord blood are “nearly zero.”
The company allegedly fails to disclose that most cord blood transplants come from public banks. It also doesn’t reveal that privately collected samples are typically insufficient for transplants.
“Taking advantage of parents’ love for their children is reprehensible and illegal,” Attorney General Paxton said in a news release. “CBR has systematically put their greed ahead of consumers and the health of Texans, and it’s time for the company to face justice.”
Major medical organizations, including the American Medical Association, recommend public cord blood banking over private options. They cite insufficient evidence for the utility of private banking and the greater value of public banking to patients.
CBR allegedly uses emotional sales tactics to frighten parents into believing public banks won’t have a “match” for their child. This diverts thousands of cord blood units from public repositories.
“The actions taken unfairly targeted new parents and were specifically designed to weaponize a parent’s instinct to protect their kids in order to make a quick buck,” Paxton said. “That’s unacceptable, and I’m filing this lawsuit to put an end to this deception immediately.”
The attorney general seeks civil penalties and injunctive relief for violations of Texas consumer protection laws.
