Many families are happy to pay for the assurance of a healthy future. More than two million umbilical cord samples sit in a handful of suburban warehouses across the country. It’s a lucrative business, with companies charging several thousand dollars upfront plus hundreds more every year thereafter. The industry has grown rapidly, bolstered by investments from medical device companies, hospital partnerships and endorsements from celebrities like Drew Barrymore and Chrissy Teigen.

But the leading banks have consistently misled customers and doctors about the technology’s promise, an investigation by The New York Times found. Doctors rarely use cord blood anymore, thanks to advances that have made it easier to transplant adult stem cells. And the few parents who try to withdraw cord blood samples often find that they are unusable — either because their volume is too low or they have been contaminated with microbes.

When the first cord blood banks opened three decades ago, doctors were optimistic about turning the stem cells, otherwise discarded as medical waste, into a powerful new treatment for patients with leukemia and other blood disorders. Private banks promised peace of mind for anxious parents-to-be, knowing the cells would be ready and waiting if their child ever got sick.

That potential has not materialized. Just 19 stem-cell transplants using a child’s own cord blood have been reported since 2010, according to the Center for International Blood and Marrow Transplant Research. Newer research has led many doctors to abandon cord blood in favor of adult stem cells.

Yet private banks trumpet the cells’ lifesaving possibilities, and legions of their sales representatives peddle cord blood as if it were at the medical vanguard. They woo customers in hospital pregnancy classes and offer obstetricians free lunches, gift cards and payments of up to $700 for each sample.

The marketing seems to have worked. Cord Blood Registry, or CBR, stores more than one million samples, double the number it had in 2014. Its two main competitors, ViaCord and Cryo-Cell, each have more than 500,000 samples in storage.

The banks say that the cells have saved children’s lives and that no one knows what scientists may one day discover. “We believe in the future of cord blood,” said David Portnoy, co-chief executive of Cryo-Cell. Chet Murray, a spokesman for Revvity, which owns ViaCord, said, “The potential for future scientific advances in addition to the current clinical uses is enormous.” A representative for CooperSurgical, which owns CBR, pointed to customer testimonials on its website.

The overwhelming majority of cord blood cells sit indefinitely in liquid nitrogen tanks. Withdrawals are usually requested by parents trying to get their child into experimental trials for cerebral palsy or autism. But doctors involved in those trials have rejected about half of cells from private banks because the samples were tainted or too small.

Two of the big banks — ViaCord and CBR — have struggled with contamination, according to customers of the companies who were rejected from trials because of it.

In January, inspectors from the Food and Drug Administration found troubling signs of bacterial growth at CBR’s sole warehouse, in Tucson, Ariz. Reviewing records going back to 2018, they reported bacteria in a supposedly sterile processing area, as well as leaky bags used to collect cord samples.

Jenna Edwards, a high school administrative assistant in Parkland, Fla., spent more than $3,000 storing her son’s cord blood at ViaCord’s bank outside Cincinnati. When she tried in 2017 to withdraw the cells for a clinical trial to treat her son’s cerebral palsy, she learned that the company had found bacteria in the sample within weeks of receiving it, but still charged her for the next two years.

“They were totally fine with continuing to bank it and taking our money,” Ms. Edwards said.

She terminated the contract. But assuming the contamination was bad luck, she stored her next baby’s cord blood at the bank as well, spending another $650 on collection fees. But within weeks she discovered that it, too, was worthless: It had too few cells.

Mr. Murray said that ViaCord’s current policy was to inform customers when samples were too small or contaminated. The company offers refunds for samples below a certain volume. As for contaminated cells, he said that ViaCord does not control clinical trial protocols, and that as research progresses, “it becomes more feasible that a contaminated unit may be used.” Doctors who run such trials, however, said using contaminated cells could risk a patient’s life.

The Cord Blood Heyday

In 1988, doctors at Duke University were desperate. A 5-year-old boy was facing death from a rare blood disorder and they couldn’t find a match for a bone-marrow transplant. The boy flew to Paris for an experimental treatment of chemotherapy followed by an infusion of cord blood from his baby sister. Within three weeks, his bone marrow began producing healthy blood cells. He was cured.

“His transplant was really proof that there are blood stem cells in cord blood,” said Dr. Joanne Kurtzberg, one of the Duke doctors and now a leading expert in the field and Cryo-Cell’s medical director.

Once infused into a patient’s blood, cord blood stem cells find their way to the bone marrow and begin producing new blood cells, making them a powerful treatment — when paired with chemotherapy — for blood diseases like sickle cell anemia and leukemia.

Subsequent transplants revealed that a sick patient could receive cord blood from an unrelated donor, an advantage especially for ethnic minorities who had trouble finding immunological matches.

Cord blood banks began storing cells in 1992. Private banks charged families to freeze their children’s cells for personal use, whereas public banks collected cells from anonymous donors, to be used by anyone in need.

By 2005, the technology seemed so promising that the federal government devoted $79 million to building a national network of public banks. More than two dozen states have passed laws requiring that obstetricians educate pregnant women about cord blood banking.

Cord blood transplants reached their peak in 2011, with 896 reported in the United States.

But the excitement was short-lived. Around 2008, researchers discovered that, with the right drugs to suppress the immune system, patients could safely receive stem cells from the blood or bone marrow of relatives who were only partial matches. Many doctors found those cells preferable to umbilical stem cells, which were twice as expensive and often yielded too few cells for treatment.

As this medical innovation took off, cord blood transplants tumbled. Just 346 were reported in preliminary data for 2023, the lowest number in more than a decade.

“It’s not the preferred source of stem cells at virtually every institution in the United States,” said Dr. Robert Brodsky, chief of the hematology department at Johns Hopkins University.

Small studies have tested umbilical cord cells as treatments for conditions other than blood disorders, such as autism, diabetes and hearing loss. Most have not advanced beyond early stages of testing.

The most favorable study infused cord blood into dozens of children with cerebral palsy, a neurological disorder that causes muscle weakness and an unsteady gait. A year after treatment, children saw enough improvement in their motor function for the study to advance to the largest and most rigorous stage of testing, known as Phase 3.

With cord transplants drying up, public banks found themselves in dire financial straits. The Cleveland Cord Blood Center began selling off some of its donated cells to researchers and biotechnology companies in 2018 in order to make ends meet. The New York Blood Center, the nation’s largest public bank, stopped collecting cord blood in 2020.

Privately banked cord blood proved even less medically useful. If a child developed leukemia, for example, her own stem cells would be genetically predisposed to become cancerous.

For some diseases, such as lymphoma, doctors do use a patient’s own stem cells. But they can almost always get those cells directly from the patient’s blood. There was just one transplant using a patient’s own cord blood reported in 2023, compared with more than 16,000 done with stem cells from a patient’s own blood.

While private banks disclose in small print that the odds of using the cells are low, or that clinical trials may not pan out, they have nevertheless prospered by selling parents the hope of a “healthier tomorrow.” CooperSurgical, a major medical device company, purchased CBR’s parent company in 2021 for $1.6 billion, attributing two-thirds of its value to umbilical cord storage.

“It’s a good space, has good margins, solid growth characteristics,” Albert White, the chief executive of CooperCompanies, told investors at a San Francisco health care conference in 2022. “I should say, really strong margins.”

Paying Doctors and Celebrities

When Stacey Seaver was a sales representative for CBR, from 2018 to 2019, her biggest client was Northside Hospital in Atlanta, which says it delivers more babies than any other in the United States. She stocked collection kits in supply rooms and regularly brought the obstetricians lunch.

What the hospital didn’t tell parents: CBR paid the doctors about $250 for every baby’s sample they collected.

All three of the largest cord blood banks offer such “collection fees,” ranging from $150 to $700, according to 11 doctors and current and former bank employees.

The banks employ sales representatives like Ms. Seaver to visit obstetricians and tout their products. But unlike their peers from the pharmaceutical and medical device industries — who operate under strict laws prohibiting kickbacks to doctors — cord blood representatives are largely exempt because insurers do not cover their product.

Mr. Murray, the ViaCord spokesman, and Mr. Portnoy, the head of Cryo-Cell, said that physicians should be reimbursed for their time. CBR did not respond to questions about doctor payments.

Northside directed questions about payments to Dr. Jeffrey Marcus, the chief medical officer of Atlanta Women’s Health Group, which delivers babies at Northside. He said that collecting the cord takes less than five minutes.

“You put a needle in the cord, you tie it off, you fill out one piece of paper and you make $150 or $200,” he said. “It’s virtually no work.”

But Dr. Marcus did not think the payments were enough to change doctors’ behavior, noting that his practice does not generally recommend cord blood storage. “It’s not enough money to do something that you wouldn’t do otherwise,” he said.

Former sales representatives, however, said that collection fees were unquestionably helpful in luring some doctors to recommend a service with little medical evidence behind it.

“You’ll unfortunately have some doctors just wanting to know how much more they can make,” said Claudia D’LaRotta, who worked as a sales representative for CBR from 2005 to 2014.

The banks also market directly to parents.

Each month, CBR hosts webinars for pregnant women, providing a $25 gift card for attendance. A labor and delivery nurse in Orange County, Calif., led one such presentation in May that The Times observed. She told the group she first got interested in stem cells because her child had autism. The condition is not life-threatening, she acknowledged. But the cells work “like little ambulance drivers,” traveling through the body to help spur healing.

Duke University carried out a clinical trial of cord blood for autism, but it did not show improvements in socialization skills. There are no F.D.A.-approved stem cell treatments for autism.

Billy Russell, who worked in CBR’s customer support from 2019 to 2021, said the sales team routinely touted the possibilities of using stem cells for autism. But when customers asked to withdraw their samples for unapproved autism treatments, he had to tell them that wasn’t possible. (The company releases cells only for transplants or clinical trials approved by the F.D.A.)

“They were promised their stem cell storage would be this miracle medicine, and that wound up not being true,” he said.

Last year, CBR started a social media and television campaign with Chrissy Teigen, a model with 42 million Instagram followers who often shares about her children and pregnancies. That campaign brought in more than 5,800 new customers and $6.6 million in revenue, according to an entry submitted for a marketing award.

“Those stem cells can be used to treat over 80 different conditions,” Ms. Teigen said on “The Kelly Clarkson Show,” in a segment that was featured in the award entry. “Right now 80 — and as you know, science is ever evolving.”

When asked for a citation for the 80 conditions, a CBR representative pointed to a study, which cited another study, which cited a list of mostly blood and immune diseases compiled by a nonprofit organization, Parent’s Guide to Cord Blood Foundation.

Frances Verter, the group’s founder and the author of the list, said that most of the conditions were exceedingly rare. What’s more, she included diseases that the F.D.A. allowed to be treated with various types of stem cells — not necessarily from cord blood.

“The marketing is hype,” Dr. Verter said. And yet, she is still hopeful the technology will become useful. For decades she has paid to store the cord blood of her own adult children and grandchildren.

CBR, ViaCord and Cryo-Cell say on their websites that one in 217 people will need a stem cell transplant by the time they turn 70, citing a paper published in 2008.

But Dr. Mary Horowitz, the author of that study, said that the calculation was based on stem cells from all sources, including blood and bone marrow. “It’s misleading,” said Dr. Horowitz, the deputy director of a cancer center at the Medical College of Wisconsin. “It is extremely unlikely,” she said, that cord blood cells will ever be used.

Mr. Portnoy, the chief executive of Cryo-Cell, said he would welcome a conversation with Dr. Horowitz to “clear up any ambiguity in understanding the results.”

‘My dreams got ruined’

Anna Lazos first heard about cord blood banking in 2006, when she was pregnant with her first child. Finances were tight. She was unemployed and her husband worked as a plumber.

But they scraped together $1,600 and signed up with ViaCord. Eleven years later, after spending about $1,300 on storage fees, Ms. Lazos asked ViaCord to withdraw the sample so that her younger son could join an autism clinical trial. That study’s researchers told her that the cells were contaminated and unusable. They were growing E. coli.

“My dreams got ruined,” said Ms. Lazos, 43, now a G.E.D. instructor in Egg Harbor Township, N.J.

Mr. Murray, the spokesman, said that the cells were banked before Revvity acquired ViaCord.

Dr. Kurtzberg, the cord blood pioneer at Duke, was running the autism trial. She said that Ms. Lazo’s experience was not uncommon.

Her clinic continues to offer the experimental infusion for cerebral palsy. But of the 254 patients who were evaluated for treatment this year, she said more than half were rejected because of low-quality cells from private banks. She said the new stage of the cerebral palsy trial would allow cord blood only from public banks because the F.D.A. wanted a standardized manufacturing process for all samples.

The Times interviewed a dozen ViaCord or CBR customers who discovered their cell samples were too small or contaminated.

Renee Johnson received a letter from ViaCord after she banked in 2014 that suggested all had gone well. “Your baby’s cord blood and tissue have been processed, tested, frozen, and secured in our storage vault,” it said. But when she tried to withdraw the cells two years later, she learned they had tested positive for E. coli.

Mr. Murray said that ViaCord updated its policy in late 2020 to inform customers in writing of contaminated samples.

Kristin Prins banked her new baby’s cells at CBR in 2021 because she wanted to enroll her older son in the cerebral palsy clinical trial. (CBR has a program that offers families in these situations free banking.)

Eighteen months later, a CBR representative told her by email that her baby’s sample was contaminated on arrival. “This sometimes happens given that the delivery room is not a sterile environment,” the representative wrote.

But at the time those cells were banked, CBR employees tasked with quality control were raising concerns about subpar environmental conditions at the Tucson warehouse.

Because samples were shipped without temperature monitors, quality control specialists could not check if the cells ever got hot enough to encourage bacterial growth while en route, according to three former members of the quality assurance team, who requested anonymity to discuss problems within the factory. Two recalled telling management to add thermometers to the samples, to no avail.

This January, F.D.A. inspectors faulted CBR for five violations of quality control standards at the Tucson warehouse.

In their report, the inspectors said CBR had failed to ensure “appropriate shipping conditions,” leading to multiple cases in which the stem cells arrived warmer than the accepted threshold. They also found that, for two years, the company’s test for contamination had not worked properly and was failing to catch bacterial growth.

CBR did not respond to questions about the F.D.A. report or about quality control at its warehouse.

Two former F.D.A. inspectors who reviewed the report for The Times said it showed significant failures. “The response should be we are recalling all the products still on the market, made during this time,” said Vincent Cafiso, one of the former inspectors.

When CBR customers called to complain about contaminated cells, Mr. Russell, the customer support employee, tried to talk them down. Part of his job, he said, was to persuade them to keep paying for storage.

He would tell parents, he recalled, that “maybe we’ll be able to fix it with future medicine.”