MoneyGram 2009 Annual Report Download - page 21

Table of Contents
laws and regulations also could seriously damage our reputation and brands and result in diminished revenue and profit and increased
operating costs.
Failure by us or our agents to comply with the laws and regulatory requirements of applicable regulatory authorities could result in,
among other things, revocation of required licenses or registrations, loss of approved status, termination of contracts with banks or retail
representatives, administrative enforcement actions and fines, class action lawsuits, cease and desist orders and civil and criminal
liability. The occurrence of one or more of these events could have a material adverse effect on our business, financial condition and
results of operations.
We conduct money transfer transactions through agents in some regions that are politically volatile or, in a limited number of cases,
are subject to certain OFAC restrictions.
We conduct money transfer transactions through agents in some regions that are politically volatile or, in a limited number of cases, are
subject to certain OFAC restrictions. While we have instituted policies and procedures to protect against violations of law, it is possible
that our money transfer service or other products could be used by wrong-doers in contravention of United States law or regulations. In
addition to monetary fines or penalties that we could incur, we could be subject to reputational harm that could have a material adverse
effect on our business, financial condition and results of operations.
A material breach of security of our systems could adversely affect our business.
We obtain, transmit and store confidential customer information in connection with certain of our services. Any significant security
breaches in our computer networks, databases or facilities could harm our business and reputation, cause inquiries and fines or penalties
from regulatory or governmental authorities and cause a loss of customers. We rely on a variety of technologies to provide security for
our systems. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments, including
improper acts by third parties, may result in a compromise or breach of the security measures we use to protect our systems. We may be
required to expend significant capital and other resources to protect against these security breaches or to alleviate problems caused by
these breaches. Third-party contractors also may experience security breaches involving the storage and transmission of our data. If users
gain improper access to our or our contractor's systems or databases, they may be able to steal, publish, delete or modify confidential
customer information. A security breach could expose us to monetary liability, lead to reputational harm and make our customers less
confident in our services.
Our business is particularly dependent on the efficient and uninterrupted operation of our computer network systems and data
centers.
Our ability to provide reliable service largely depends on the efficient and uninterrupted operation of our computer network systems and
data centers. Our business involves the movement of large sums of money and the management of data necessary to do so. The success of
our business particularly depends upon the efficient and error-free handling of transactions and data. We rely on the ability of our
employees and our internal systems and processes to process these transactions in an efficient, uninterrupted and error-free manner.
In the event of a breakdown, catastrophic event (such as fire, natural disaster, power loss, telecommunications failure or physical break-
in), security breach, improper operation, improper action by our employees, agents, customer financial institutions or third party vendors
or any other event impacting our systems or processes or our vendors' systems or processes, we could suffer financial loss, loss of
customers, regulatory sanctions and damage to our reputation. The measures we have enacted, such as the implementation of disaster
recovery plans and redundant computer systems, may not be successful. We may also experience problems other than system failures,
including software defects, development delays and installation difficulties, which would harm our business and reputation and expose us
to potential liability and increased operating expenses. Certain of our agent contracts, including our contract with Walmart, contain
service level standards pertaining to the operation of our system, and give the agent a right to collect damages and in extreme situations a
right of termination for system downtime exceeding agreed upon service levels. If we experience significant system interruptions or
system failures, our business interruption insurance may not be adequate to compensate us for all losses or damages that we may incur.
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