Cash America 2012 Annual Report Download - page 59

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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.
The Company is subject to cyber security risks and security breaches and may incur increasing costs in an effort to
minimize those risks and to respond to cyber incidents.
The Company’s business involves the storage and transmission of users’ proprietary information, and security
breaches could expose it to a risk of loss or misuse of this information, litigation, and potential liability. The Company’s
e-commerce segment is entirely dependent on the secure operation of its websites and systems as well as the operation
of the internet generally. A number of companies have disclosed security breaches, some of which have involved
intentional attacks. The Company may not have the resources or technical sophistication to anticipate or prevent rapidly
evolving types of cyber attacks. Attacks may be targeted at the Company, its customers, or both. If an actual or
perceived breach of security occurs, customer and/or supplier perception of the effectiveness of the Company’s security
measures could be harmed and could result in the loss of customers, suppliers or both. Actual or anticipated attacks and
risks may cause the Company to incur increasing costs, including costs to deploy additional personnel and protection
technologies, train employees, and engage third party experts and consultants.
A person who is able to circumvent the Company’s security measures could misappropriate the Company’s or
its users’ proprietary information, cause interruption in its operations, damage its computers or those of its users, or
otherwise damage its reputation and business. Any compromise of security could result in a violation of applicable
privacy and other laws, significant legal and financial exposure, damage to the Company’s reputation, and a loss of
confidence in its security measures, which could harm its business.
Most of the Company’s customers provide personal information, including bank account information when
applying for consumer loans. The Company relies on encryption and authentication technology licensed from third
parties to provide the security and authentication to effectively secure transmission of confidential information,
including customer bank account and other personal information. Advances in computer capabilities, new discoveries in
the field of cryptography or other developments may result in the technology used by the Company to protect transaction
data being breached or compromised. Data breaches can also occur as a result of non-technical issues.
The Company’s servers are also vulnerable to computer viruses, physical or electronic break-ins, and similar
disruptions, including “denial-of-service” type attacks. The Company may need to expend significant resources to
protect against security breaches or to address problems caused by breaches. Security breaches, including any breach by
the Company or by persons with whom it has commercial relationships that result in the unauthorized release of its
users’ personal information, could damage its reputation and expose it to a risk of loss or litigation and possible liability.
In addition, many of the third-parties who provide products, services or support to the Company could also
experience any of the above cyber risks or security breaches, which could impact the Company’s customers and the
Company’s business and could result in a loss of customers, suppliers or revenue
Any of these events could result in a loss of revenue and could have a material adverse effect on the Company’s
business, prospects, results of operations and financial condition.