Court Rejects Cord Blood Bank CBR System’s Attempts to Dismiss Arizona Consumer Fraud Case

TUCSON – Attorney General Kris Mayes announced that this week a Maricopa County Judge denied an attempt by CBR Systems, Inc. (“CBR”) to dismiss the consumer fraud lawsuit the Attorney General filed earlier this year alleging the company engaged in deceptive and unfair practices that preyed on the families of newborn babies.  

“We know Arizona parents and families fell victim to the scam of CBR’s cord blood pitch,” said Attorney General Kris Mayes. “I’m grateful that the Court denied the defendant’s attempts to dismiss this case. The state will continue to press this case on behalf of Arizonans and consumers throughout the country who were allegedly deceived by CBR.”  

The complaint details allegations of CBR systematically misleading consumers, failing to deliver on its promises, and engaging in an unethical kickback scheme with healthcare providers: 

• The complaint alleges that CBR created a grossly misleading impression about the likelihood that a family would ever be able to use the store cord blood for future transplant. However, experts estimate the likelihood of using the stored cord blood is, at best, from a 1:400 to a 1:200,000 chance over the child’s lifetime. 

• 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. 

• 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. 

• 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. 

If you believe you have been the victim of consumer fraud or unfair practices, you can file a complaint with the Attorney General’s Office at www.azag.gov/consumer.  If you need a complaint form sent to you, you can contact the Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431.

A copy of the order is here.