Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 43

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 43
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damage claims, fines, sanctions or injunctive relief that, if granted, could require us to pay damages or make other expenditures in amounts
that could have a material adverse effect on our financial position and our results of operations. We have recorded loss contingencies
in our financial statements only for matters on which losses are probable and can be reasonably estimated. Our assessments of these matters
involve significant judgments, and may change from time to time. Actual losses incurred by us in connection with judgments or settlements
of these matters may be more than our associated reserves. Furthermore, defending lawsuits and responding to governmental inquiries or
investigations, regardless of their merit, could be costly and divert management’s attention from the operation of our business.
Unfavorable outcomes in any such current or future proceedings could materially and adversely affect our results of operations, financial
conditions and cash flows. As a consumer finance company, we are subject to various consumer claims and litigation seeking damages and
statutory penalties based upon, among other things, disclosure inaccuracies and wrongful repossession, which could take the form of a
plaintiff’s class action complaint. We, as the assignee of finance contracts originated by dealers, may also be named as a co-defendant
in lawsuits filed by consumers principally against dealers. We are also subject to other litigation common to the automobile industry
and to businesses in general. The damages and penalties claimed by consumers and others in these types of matters can be substantial.
The relief requested by the plaintiffs varies but includes requests for compensatory, statutory and punitive damages.

While we intend to vigorously
defend ourselves against such proceedings, there is a chance that our results of operations, financial condition and cash flows could
be materially and adversely affected by unfavorable outcomes.

Negative Publicity Associated with Litigation, Governmental Investigations,
Regulatory Actions, and other Public Statements Could Damage Our Reputation.

From time to time there are
negative news stories about the “sub-prime” credit industry. Such stories may follow the announcements of litigation or regulatory
actions involving us or others in our industry. Negative publicity about our alleged or actual practices or about our industry generally
could adversely affect our stock price and our ability to retain and attract employees, which could in turn negatively affect our results
of operations or cashflows.

If We Experience Problems with Our Originations, Accounting or
Collection Systems, Our Results of Operations May Be Impaired.

We are dependent on our receivables
originations, accounting and collection systems to service our portfolio of automobile contracts.