All you grandparents and parents with young daughters, pay heed, THIS IS TRUE.

You might find the following article from snopes.com interesting: http://www.snopes.com/medical/toxins/hairband.asp
Read the last paragraph, most important!

Be cautious of hair bands at open markets around the city too – they are probably from Chhina since they are purchased in bulk very very cheap !!!! 
Take a good look before buying hair bands in future – specially like the following kind…..
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These Hair bands were made from used condoms and threads. That was so disgusting, I would not want to use them!!

BEIJING (AFP) - Used condoms are being recycled into hair bands in southern China threatening to spread sexually-transmittable diseases they were originally meant to prevent, state media reported Tuesday
In the latest example of potentially harmful Chinese-made products, rubber hair bands have been found in local markets and beauty salons in Dongguan and Guangzhou cities in southern Guangdong province, China Daily newspaper said.
‘These cheap and colorful rubber bands and hair ties sell well ….. threatening the health of local people,’ it said.
Despite being recycled, the hair bands could still contain bacteria and viruses, it said.
‘People could be infected with AIDS, (genital) warts or other diseases if they hold the rubber bands or strings in their mouths while waving their hair into plaits or buns,’ the paper quoted a local dermatologist who gave only his surname, Dong, as saying. A bag of ten of the recycled bands sells for just 25 s en (three cents), much cheaper than others on the market, accounting for their popularity, the paper said.
A government official was quoted as saying recycling condoms was illegal.   China ’s manufacturing industry has been repeatedly tarnished this year by a string of scandals involving shoddy or dangerous goods made for both domestic and foreign markets.
In response, it launched a public relations blitz this summer aimed at playing up efforts to strengthen monitoring systems.
Check your children’s hair bands and make sure they do not put them in their mouth while trying to plait or tie their hair

I cannot say whether this true or not but I would err on the side of caution. Wouldn’t you??