PHOENIX – Attorney General Kris Mayes today announced a lawsuit against CBR Systems, Inc. (“CBR”), alleging the company engaged in deceptive and unfair practices that preyed on families at one of the most vulnerable moments of their lives—the birth of a child.
CBR, one of the nation’s largest cord blood banking companies, marketed itself as a trusted partner for parents hoping to safeguard the future health of their newborns by preserving valuable biological materials. Cord blood banking is when a baby's umbilical cord blood is collected and stored after delivery. This cord blood contains valuable stem cells that help treat life-threatening diseases.
However, the lawsuit, filed in Maricopa County Superior Court, alleges that CBR systematically misled consumers, failed to deliver on its promises, and engaged in an unethical kickback scheme with healthcare providers.
“Families put their trust in CBR at a deeply personal and emotional moment—the birth of a child—believing they were making a responsible, potentially life-saving investment in their baby’s future,” said Attorney General Mayes. “Instead, our complaint alleges that CBR deceived parents about the potential uses and viability of their child’s cord blood and tissue while quietly paying kickbacks to doctors who recommended its services. This is consumer fraud at its worst.”
According to the complaint, CBR misrepresented the way it handled and stored cord blood and tissue, assuring parents that their baby’s cord blood and tissue would remain viable for potential medical use while engaging in practices that put the integrity of those samples at risk. The lawsuit alleges that CBR misled consumers by claiming it provided safe and secure transportation for cord blood samples to its Tucson facility. In reality, the complaint states, samples were shipped without strict temperature controls or monitoring, leaving no way for consumers to determine if they were compromised during transit—potentially rendering them unusable.
For families who made financial sacrifices to invest in CBR’s services, the alleged deception meant not only wasted money but also the potential loss of a critical medical resource they had counted on for their child’s future health.
The complaint also alleges that CBR misled consumers by disparaging public cord blood banking options, portraying them as inferior or unreliable to steer parents towards costly private banking without fully informing them of viable, less expensive alternatives. The complaint alleges that CBR recruited doctors to promote its services by offering financial incentives, including free lunches, gift cards, and kickbacks of up to $700 per sample. By enlisting obstetricians and gynecologists—trusted advisors for expectant parents—CBR created the appearance of medical endorsement without disclosing that these physicians were being compensated to market its services.
“Families were not just misled by a company—they were misled by medical providers they trusted,” said Attorney General Mayes. “New parents should be able to rely on their doctors to provide unbiased advice, not steer them toward a company that is secretly paying for their recommendation.”
The lawsuit alleges that CBR violated the Arizona Consumer Fraud Act through deceptive and unfair practices. The Attorney General’s Office is seeking restitution for affected consumers, civil penalties of up to $10,000 per willful violation, and an injunction to stop CBR from engaging in these unlawful and unethical practices in Arizona. Additionally, the lawsuit seeks to compel CBR to disgorge all profits, gains, gross receipts, or other benefits obtained through its unlawful conduct.
Attorney General Mayes encourages any Arizonan who used CBR’s services and believes they were misled to file a complaint with the Attorney General’s Office. Consumers can submit complaints online at www.azag.gov/consumer.
“As long as I am Attorney General, any company that preys on parents during one of the most important moments of their lives will be held accountable,” said Attorney General Mayes. “We will fight to ensure CBR answers for its actions and that Arizonans get the honesty and transparency they deserve.”
A copy of the filed complaint is available below.