Wet Seal (WTSLA)

Three lawsuits have been filed against us alleging violations of the Fair Credit Reporting Act.

In fiscal 2007 and fiscal 2008, we were served with a total of three class action complaints alleging violations of The Fair Credit Reporting Act (one of the complaints was dismissed in August 2007). The Act provides in part that portions of the credit card number may not be printed together with expiration dates on credit or debit card receipts given to customers. The Act currently imposes significant penalties upon violators of these rules and regulations where the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. We do not believe that we have any liability for the violations alleged in the complaints and will vigorously contest these allegations. Moreover, there is pending legislation in Congress that would modify the definition of a “willful” violation in a manner favorable to our company. However, in the event we are found to have liability under the Act for these allegations, significant damages could be assessed against our company, which could have a material adverse effect on our financial condition and results of operations as well as consumer perception of our company.

Two lawsuits have been filed against us alleging violations of the Fair Credit Reporting Act.

In January and February 2007, we were served with two class action complaints alleging violations of The Fair Credit Reporting Act. The Act provides in part that portions of the credit card number may not be printed together with expiration dates on credit or debit card receipts given to customers. The Act imposes significant penalties upon violators of these rules and regulations where the violation is deemed to have been willful. Otherwise damages are limited to actual losses incurred by the card holder. The Company does not believe that it has any liability for the violations alleged in the complaints and will vigorously contest these allegations. However, in the event we are found to have liability under the Act for these allegations, significant damages could be assessed against our company and could have a material adverse effect on our financial condition and results of operations.