Cash America 2007 Annual Report Download - page 35

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and permitting laws. Actions taken in the future by local governing bodies to require special use permits
for, or impose other restrictions on pawnshops or cash advance lenders could have a material adverse
effect on our business, results of operations and financial condition.
Finally, in recent years, the cash advance industry has been subject to regulatory proceedings, class
action lawsuits and other litigation concerning the offering of cash advances, and we could suffer losses
from interpretations of state laws in those lawsuits or regulatory proceedings, even if we are not a party
to those proceedings.
xThe failure of third-parties who provide products, services or support to the Company to
maintain their products, services or support could disrupt Company operations or result in a loss
of revenue. The Company’s cash advance revenues depend in part on the willingness and ability of
unaffiliated third-party lenders to make loans to customers and with other third parties to provide
services to facilitate lending and loan underwriting in both the storefront and online cash advance
channels. The loss of the relationship with any of these third parties, and an inability to replace them, or
the failure of these third parties to maintain quality and consistency in their programs or services could
cause the Company to lose customers and substantially decrease the revenues and earnings of the
Company’s cash advance business. The Company makes other non-cash advance products and services
provided by various third-party vendors available to its customers. If a third-party provider fails to
provide its product or service or to maintain its quality and consistency, the Company could lose
customers and related revenue from those products or services. The Company also uses third parties to
support and maintain certain of its communication systems and computerized point-of-sale and
information systems. The failure of such third parties to fulfill their support and maintenance
obligations could disrupt the Company’s operations.
xThe Company’s business depends on the uninterrupted operation of the Company’s facilities,
systems and business functions, including its information technology and other business systems.
The Company’s business, particularly its online business, depends highly upon its employees’ ability to
perform, in an efficient and uninterrupted fashion, necessary business functions, such as Internet
support, call centers, and processing and making cash advances. A shut-down of or inability to access
the facilities in which the Company’s online operations and other technology infrastructure are based,
such as a power outage, a failure of one or more of its information technology, telecommunications or
other systems, or sustained or repeated disruptions of such systems could significantly impair its ability
to perform such functions on a timely basis and could result in a deterioration of the Company’s ability
to write and process online cash advances, provide customer service, perform collections activities, or
perform other necessary business functions.
A security breach of the Company’s computer systems could also interrupt or damage its operations or
harm its reputation. In addition, the Company could be subject to liability if confidential customer
information is misappropriated from its computer systems. Despite the implementation of significant
security measures these systems may still be vulnerable to physical break-ins, computer viruses,
programming errors, attacks by third parties or similar disruptive problems. Any compromise of security
could deter people from entering into transactions that involve transmitting confidential information to
the Company’s systems, which could have a material, adverse effect on the Company’s business.
xThe Company may be unable to protect its proprietary technology or keep up with that of its
competitors. The success of the Company’s business, particularly its online business, depends to a
significant degree upon the protection of its software and other proprietary intellectual property rights.
The Company may be unable to deter misappropriation of its proprietary information, detect
unauthorized use or take appropriate steps to enforce its intellectual property rights. In addition,
competitors could, without violating the Company’s proprietary rights, develop technologies that are as
good as or better than its technology. The Company’s failure to protect its software and other
proprietary intellectual property rights or to develop technologies that are as good as its competitors’