In court documents filed in the Suffolk Superior Court, the Attorney General’s Office accused New England Cord Blood Bank of violating its agreements with some clients. The situations that were cited were the company’s automatic renewal of cord blood storage agreements after contracts should have expired, and the company’s continued charges to customers even after they had notified the company they wanted to end the agreement. Instead, the company required parents to send a notarized “discard form” to sever the obligation.

From an outsider’s perspective, these actions do not seem fully unreasonable. For instance, many health clubs, phone companies, and utility companies follow similar business practices to those described.

However, the  Newton, Massachusetts-based company, made the strategic decision to resolve the allegations, signing a consent agreement on Jan. 16 where it promised it will issue $20,624 in refunds to a total of clients 119, who will receive an average refund of $173. It also agreed to pay the state of Massachusetts $20,000, which includes a $15,000 penalty and $5,000 owed for the Attorney’s General’s costs.

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