Cash America 2011 Annual Report Download - page 60

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The 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 lending 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’ could put the
Company at a disadvantage to its competitors. Any such failures could have a material adverse effect on the Company’s
business.
Security breaches, cyber attacks or fraudulent activity could result in damage to the Company’s operations or lead to
reputational damage.
A security breach or cyber attack of the Company’s computer systems could interrupt or damage the Company’s
operations or harm its reputation. Despite the implementation of security measures, the Company’s systems may still be
vulnerable to data theft, computer viruses, programming errors, attacks by third parties or similar disruptive problems.
If the Company were to experience a security breach or cyber attack, it could be required to incur substantial
costs and liabilities, including, among other things, the following:
xexpenses to rectify the consequences of the security breach or cyber attack,
xliability for stolen assets or information,
xcosts of repairing damage to the Company’s systems,
xlost revenue and income resulting from any system downtime caused by such breach or attack,
xincreased costs of cyber security protection,
xcosts of incentives the Company may be required to offer to its customers or business partners to retain their
business, and
xdamage to the Company’s reputation causing customers and investors to lose confidence in the Company.
In addition, any compromise of security or a cyber attack could deter consumers from entering into transactions
that involve transmitting confidential information to the Company’s systems. Further, if confidential customer
information or information belonging to the Company’s business partners is misappropriated from the Company’s
computer systems, the Company could be sued by those who assert the Company did not take adequate precautions to
safeguard its systems and confidential data belonging to the Company’ customers or business partners, which could
subject the Company to liability and result in significant legal fees and expenses of defending these claims. As a result,
any compromise of security of the Company’s computer systems or cyber attack could have a material adverse effect on
the Company’s business, prospects, results of operations and financial condition.
Current and future litigation or regulatory proceedings could have a material adverse effect on the Company’s
business, prospects, results of operations and financial condition.
The Company has been and is currently subject to lawsuits (including purported class actions) that could cause it
to incur substantial expenditures and generate adverse publicity. The Company is also likely to be subject to further
litigation in the future. The consequences of an adverse ruling in any current or future litigation could cause the
Company to have to refund fees and/or interest collected, refund the principal amount of advances, pay treble or other
multiple damages, pay monetary penalties and/or modify or terminate the Company’s operations in particular states.
Defense of any lawsuit, even if successful, could require substantial time and attention of the Company’s management
and could require the expenditure of significant amounts for legal fees and other related costs. Settlement of lawsuits
may also result in significant payments and modifications to the Company’s operations. The Company is also subject to
regulatory proceedings, and the Company could suffer losses from interpretations of state laws in those regulatory