Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 44

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 44
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 We also rely on third-party service
providers to facilitate certain aspects of our business. Our systems and the systems of our third-party service providers are vulnerable
to damage or interruption from natural disasters, power loss, telecommunication failures, terrorist attacks, cyberattacks, computer viruses
and other events. A significant number of our systems are not redundant, and our disaster recovery planning is not sufficient for every
eventuality. Our systems are also subject to break-ins, sabotage and intentional acts of vandalism by internal employees and contractors
as well as third parties. Our third-party service providers face similar threats. Despite any precautions we may take, such problems could
result in interruptions in our services, litigation, and regulatory exposure, which could harm our reputation and financial condition.
We do not carry business interruption insurance sufficient to compensate us for losses that may result from interruptions in our service
as a result of system failures. Such systems problems could materially and adversely affect our results of operations, financial conditions
and cash flows.

 25 

A Breach in the Security of Our Systems Could Result in the Disclosure
of Confidential Information, Subject us to Liability.

We hold in our systems confidential
financial and other personal data with respect to our customers, which may be of value to identity thieves and others if revealed. Although
we endeavor to protect the security of our computer systems and the confidentiality of customer information entrusted to us, there can
be no assurance that our security measures will provide adequate security.

It is possible that we may
not be able to anticipate, detect or recognize threats to our systems or to implement effective preventive measures against all security
breaches, especially because the techniques used change frequently, or are not recognized until launched, because of the rising use of
artificial intelligence, and because cyberattacks can originate from a wide variety of sources, including third parties outside the Company
such as persons who are associated with external service providers or who are or may be involved in organized crime or linked to terrorist
organizations.

Such persons may also attempt
to fraudulently induce employees or other users of our systems to disclose sensitive information in order to gain access to our data or
that of our customers.

These risks may increase in
the future as we continue to increase our mobile-payment and other internet-based product offerings and expand our use of web or cloud-based
products and applications.

A successful penetration of
the security of our systems could cause serious negative consequences, including disruption of our operations, misappropriation of confidential
information, or damage to our computers or