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6 Little-Known Facts about Debt Collection Compliance

13 May

Debt collection is one of the most heavily regulated activities you will ever undertake.

The debt collection industry is one of the most heavily regulated in the United States. That is precisely why it’s risky to undertake debt collections on your own; there are rules for when and how past due clients can be contacted, what mediums you can use to reach out, what you can say, and how often you can say it.

There are federal rules and industry-specific rules, rules for how data is collected and stored, and even rules for what you should do if a consumer or past due client asks you to stop contacting them. These rules can shift quickly, but failing to stay compliant can promptly get a business into hot water.

We’ve compiled half a dozen rules currently governing the debt collection industry. These rules also apply and those businesses seeking a more DIY approach.

Following the Rules for Debt Collection

First, let’s start with the rules under the Fair Debt Collection Practices Act (FDCPA), the federal law that protects consumers from overzealous debt collection agents.

  1. The FDCPA usually does not cover a business debt. If your business is trying to collect a past due mortgage, credit card, medical bill, or personal or household-type debts, your debt collection practices are covered by FDCPA.
  2. The FDCPA regulates time and place of debt collection. For example, your debt collection efforts cannot occur before 8:00 a.m. or after 9:00 p.m. If you attempt debt collection in the workplace and the consumer or client asks you to stop, you may not continue your efforts.
  3. If you’ve been informed that an attorney is representing the client, debt collection must go through them and not the customer.
  4. If the past due client writes to tell you to stop contacting them, you cannot contact them. The exception is that you may tell them there will be no further contact or inform them that other legal action will be taken. It doesn’t mean you can’t pursue other avenues of debt collection, just that you cannot contact them to collect the debt.
  5. A debt collection agent is required to tell you certain things about the debt, specifically who the money is owed to, how much, and how the client can dispute the debt. If this information isn’t provided on initial contact, you have five days to send these details in writing.
  6. If the past due account holder disputes the past due debt within 30-days of receipt of the initial communication, you must stop all collection activityuntil you have verified the past due debt.

There are also rules under the Fair Credit Reporting Act governing how debt collection and past due balances can be documented in credit reports. There are even state laws governing fair practices by anyone conducting debt collection. Keeping compliant with all of these rules is a full-time job. That’s exactly why businesses turn to TSI. Our track record of compliance with all debt collection laws, along with decades of experience in most industries make us the top company in the nation to partner with companies seeking a better bottom line.

The TSI data-driven approach is designed to boost debt recovery while enhancing the relationship with your valuable customers. Contact me directly at 770-224-8504 for more information.

Best Practices for Collecting Debt from Millennials in 2019

29 Apr

Millennials, those youthful consumers born after 1980, are about to overtake Baby Boomers as the largest living adult population in the U.S., with more than 74 million of them working and accruing debt. Speaking of debt, there is a lot of it; CNBC says the average student loan debt is around $33,000  – and yet that isn’t even the main source of debt for the older millennial.

That’s why the chances are good that your business will often be conducting debt collection from the millennial population. What are some special considerations related to this age group? Are there any communication best practices to follow?

Facts About Millennials and The Debt They Accrue

According to CNBC, Millennials between the ages of 25 and 34 have around $42,000 in debt. The highest level of debt is from credit cards. But CNBC says these young professionals also have other stressors that prior generations didn’t have, such as higher education expenses and student loans as well as the high cost of housing. Almost one-half of Millennials are 90-days past due on at least one bill. In fact, Americans owe more than $1 trillion in debt from student loans. It’s possible that other debts will suffer as these people spend more money on college debt.

While debt is increasing across all age brackets in the United States, these trends are particularly troubling for an age group that is just getting started on a career path. CNBC says that Generation Z, the age bracket that comes behind the Millennials is following in their footsteps with an average debt of $4,343.

Given the high debt ratio for these young people, are there any considerations for handling collecting debt that might be different from older populations?

Best Practices for Collecting Debt from Millennials

Collecting debt from Millennials is actually different from GenX or the Baby Boomers. First, it might be more difficult to reach these young consumers, because most of them have given up a landline for a personal smartphone.

Pursuing debt collection from this youthful population requires a few tricks in order to accommodate their personal preferences and styles:

  • Use technology to reach Millennials. They are one of the first generations to grow up with the immediacy of the internet and a host of software tools. Debt collection must mine this tech-familiarity to reach these consumers.
    Tip: Try setting up a web portal so these customers can explore easy online payment.
  • Make connections with Millennials and use the power of relationships to pursue debt collections.
    Tip: A compassionate and diplomatic approach to debt collection can go a long way when it comes to collecting what’s owed.

Debt collection for the Millennial population requires some flexibility to handle the special needs of this population. Contact me today at 770-224-8504 for more information.

Businesses and Cash Flow

22 Apr

Business and Cash Flow

The first rule of business is to stay in business, and businesses need cash to operate. Every successful business keeps a close eye on cash flow for this reason. There are many tax-saving advantages for those who own or have improved commercial properties through tax law. If you own or lease commercial or income producing property and you are not taking advantage of all that US Tax Code has to offer, you are actually diminishing cash flow.

Let’s look at how your business can easily increase its cash flow by using the cost segregation method of depreciating your building.

Cost segregation is a way for commercial property owners to accelerate their building’s depreciation, saving significantly on income taxes. Within the first five years of building ownership, an owner can save up to $100,000 for every $1 million in building costs. To maximize cash flow, an owner or lessee who has paid for improvements can have a cost segregation study performed.

At CSSI, we perform an engineering-based study to ensure you comply with US Tax Code rules and regulations. Our team of specialists will segregate parts of your building that are deemed non-structural. Non-structural items include carpeting, flooring, cabinets, specialty lighting and electrical, etc. These and other non-structural items are placed in accelerated tax lives. After the analysis, your CPA will adjust your depreciation schedule from the conventional 27.5-/39-year schedule to a 5-, 7-, 15-, and 27.5-/39-year schedule.
A cost segregation study reduces your taxable income and results in lower taxes paid. Using this cash surplus to reinvest in your business or pay down debt is a great way of maximizing the time value of money.

At CSSI, our tax experts will help your business generate more cash flow through an engineering-based study. In some cases, the calculations from our study can be necessary to realize benefits from the 2014 Repair Regulations and the 2017 TCJA. Contact us today, and we can provide you with a no-cost preliminary analysis, and we can facilitate a discussion with you and your CPA or tax professional.

Contact me directly at 770-224-8504, or schedule a conversation with me by clicking here, to see how much you can add to your cash flow this year. There is, as always, no cost or obligation.

It’s Your Money . . . Keep More of It!

3 Debt Collection Agency Myths

8 Oct

mythsvsfacts

The facts show third-party debt collections provide a needed service for businesses of any size.

How much do you really know about collection agencies and how they work? Unless you’ve partnered with a debt collection agency, there’s a good chance that you’ve been misled about how the debt collection process works and the impact it will have on your business.

Here are some common myths about the debt collection industry:

  1. Debt collection agents are a rough-around-the-edges crew that bullies people. TSI’s interactions with customers are always diplomatic. We work WITH your customers to get them back on track.
  1. Debt collectors will try anything to get money. Debt collection is a strictly regulated industry. Professional debt collection agencies stay current with all applicable laws. TSI’s commitment to compliance means customers are always treated with the utmost respect, while your brand is protected from costly compliance violations.
  1. It’s better to take the tax write-off; hiring a debt collection agency is too expensive, even for large companies. Partnering with a professional debt recovery company is an affordable option. Writing off an unpaid invoice may be helpful, but collecting on the debt is even better. Although collection agencies charge for their services, the amount collected and returned to you will likely be more than the taxes saved if you write-off the debt. TSI offers affordable fixed-fee pricing on early-stage delinquent accounts and contingency-based fees for your more challenging or older accounts.

Debt Collection: Take a Closer Look

If your company has been handling collections in-house, you already know that debt collection is governed by a variety of local, state, and federal rules that prohibit and regulate how customers are approached for past due balances. In fact, debt collection is one of the most regulated industries in the United States. These rules prohibit collectors from behaving aggressively or inappropriately with consumers; they even govern when a debt collection agency can contact the past due client.

According to Inside ARM, the debt collection agency industry is a valuable asset to improve the bottom line for businesses in any industry. Their report shows that the industry regularly returns around $39 billion annually to companies that offer consumer credit.

Debt collections activities help replenish the bottom line of businesses that struggle with a high volume of bad debt. Quite simply, the collections industry reduces the risk for businesses offering consumer credit, something that is imperative for keeping the economy going. Companies that seek a healthier bottom line use debt collection companies to recover some of the most difficult past due balances, which frees up internal teams to focus on the job at hand.

The types of debt collected impacts companies of all sizes in the following industry sectors:

  • Healthcare
  • Financial services
  • Student loans
  • Government
  • Retail
  • Telecom
  • Utility
  • Auto
  • Small- to mid-sized business

When debt is collected businesses can keep a positive cash flow which not only means they can keep prices low, it also helps ensure the overall success of the organization.

How Could a Debt Collection Agency Help your Business?

A reputable debt collection agency like TSI can deliver outstanding results. Our sophisticated collection activities use a data-driven, client-centric approach. Beyond a basic debt collection agency, TSI can also provide end-to-end strategic accounts receivable management.

TSI can maximize recoveries and boost cash flow, streamline your accounts receivable management processes, and reduce internal expenses and administrative responsibilities. And because TSI keeps a focus on the customer experience, our services will not damage your organization’s reputation.

A quality debt collection service like TSI helps improve the bottom line of the businesses we serve. TSI clients recognize this impact, and we’re proud of these partnerships that are a win/win. Contact TSI today to learn more about our services and the value they can offer your business. For more information, contact me today!  Always ready to help!

4 Tax Tips For Commercial Building Owners

13 Sep

Recently, the regulations for commercial property owners were overhauled in one of the most dramatic changes to the tax law in years.  The Tangible Property Regulations in conjunction with the Tax Cuts and Jobs Act have major economic benefits for building owners as well as some serious compliance issues.

tax-time_1

Properly applying these new U.S. tax code standards can help you capture economic opportunities to the tune of millions in tax savings that flow from your business to your personal taxes.

I would be happy to work with you and your tax professional to make sure you are taking the greatest advantage of these new tax laws.  CSSI, a company that I represent, can be your calculation experts for the following

  1. COST SEGREGATION – The U.S. tax cost method of identifying and classifying building components that allow you to accelerate depreciation and generate additional cash flow. An engineering-based cost segregation study is the basis for allowing you to capture many of the tax saving opportunities below and it helps you maintain U.S. tax code compliance moving forward with these regulations.
  2. BUILDING SYSTEMS VALUATION – An engineering-based study that will identify building systems and structural components.  Going forward every expenditure cannot be expensed.  The new regulations give very specific instructions on whether expenditures should be capitalized as an “improvement” or expensed as a repair.  We will provide the calculations that your tax professional will need to make these important decisions.
  3. CAPITAL TO EXPENSE “REVERSAL” OPPORTUNITY – Building owners may now expense previously capitalized costs and expense them in the current year by applying the new regulations to prior years.  For example, we helped a client receive $1.1 Million in tax savings on one of his properties through this method.
  4. PARTIAL ASSET DISPOSITION (PAD) – Renovate in the current tax year?  Thinking of an LED lighting upgrade?  A PAD allows you to write down the basis of what you removed and the costs for the removal and disposal of those items.  You can receive a tax deduction in the current year but it is a “use it or lose it” opportunity.  Fail to capture it in the current tax year and you lose the ability to write it down.  Both capital to expense reversals and PADs yield a permanent tax savings at the time of the sale by reducing recapture costs.

Let me provide you and your tax professional a no-cost, no-bligation analysis of the benefits you may receive and the cost for this type of study for your property.

Return the following information, and I will prepare your analysis immediately.

 

DIY Collections – Don’t Risk It!

11 Sep

There are very clear rules about what can and can’t be said during debt collections.

The debt collection industry is governed by so many rules and regulations it could make your head spin. That’s why do-it-yourself debt collections can quickly get a company into hot water with state and federal regulators.

What are the rules that govern debt collections? What are debt collection agents never allowed to say and do? This article explores common mistakes businesses make when attempting DIY debt collections.

Bill Collector

Debt Collections No No’s

Three things you can never say when attempting debt collection:

  • Threaten to tell a boss, coworkers, or family about a past due balance. While you can contact work to try to find the customer, never share details about the debt to any third party.
  • Threaten to arrest the past due customer.
  • Don’t say, “I’ll just keep calling you.” Legally, you can’t call the person before 8:00 am or after 9:00 pm. If you call the customer at work and they ask you to stop calling there, you have to comply, however, the request must be in writing.

Understanding the rules means following federal legislation called the Fair Debt Collection Practices Act and the guidelines set by the Consumer Financial Protection Bureau.

Understanding debt collection rules is important for avoiding federal and state penalties.

If all this seems like a lot of rules for you to keep track of, you would be right. Debt collections are a highly regulated activity that makes it risky to take a DIY approach.

The good news is that there are services like TSI to help ensure debt recovery that complies with all rules and regulations. Our proven system is compliant, effective, and guaranteed.

Bonus Tip:

Various government agencies provide guidelines that help ensure that consumer rights are protected. There are specific practices that collectors must always avoid.  

Debt collectors cannot use unfair practices to collect a debt. This means debt collection practice can never include the following [Do not]:

  • Attempt to collect charges in addition to the debt. That is, unless they are allowed by contract or specific state law.
  • Deposit a post-dated check early.
  • Communicate by postcard.
  • Use language or a symbol on the envelope of a letter that indicates the correspondence is from a debt collector.

Consumers have rights that must be honored, which is why strict guidelines and regulations govern debt recovery practices. Not only is it essential that debt collectors treat consumers with respect, in addition, there are specific practices that collectors must always avoid. For instance, did you know that an individual can send a “cease and desist” correspondence to a debt collector – which means the debt collector is required to stop contacting the customer. The problem stems from an overly aggressive debt collector that goes after the customer over and over again in a short amount of time. Under federal law, this is considered harassment and if the activity continues after the cease and desist letter is received, the customer can report the debt collector to governing agencies.

Want higher recovery of past due accounts? Don’t put your business at risk by using a DIY approach; instead, put TSI’s simple system to work for your business. It’s convenient and designed with small- and mid-sized businesses in mind, AND interfaces directly with most accounting and practice management software.

Contact me for more information on how to:
  • Collect more of your A/R
  • Collect your A/R faster
  • Stay 100% compliant while collecting your A/R
  • Save both staff time and money

5 Things to Avoid When Collecting Debt From Customers

22 Aug

Before conducting debt collections, make sure you understand the do’s and don’ts of the industry.

The do’s and don’ts of collecting debt are a sticky wicket. If you do it wrong, you can alienate potential customers, ruin your reputation, and maybe even pick up a hefty fine from regulators. Playing by the rules means compliance with all laws, certainly, but also collecting debt in a way that treats every customer with dignity and respect.

Here are five things to avoid when collecting debt from customers.

Do Not Try This at Home – or at the Office

We’ve heard all the horror stories from collections gone awry. Industry publications such as Inside ARM often report on companies fined by regulators for breaking collection regulations. Our biggest complaint, beyond the fact that these techniques are generally not effective, is that conducting yourself in this manner gives the collections industry a bad reputation. Not good!

The best course of action is to partner with a professional collection agency like TSI. But just in case you plan to give debt recovery on your own a try, here are some things that should never be part of your DIY debt collection strategy:

  1. Don’t stalk your customers. Really! This means you (or the debt collector for that matter) cannot show up at someone’s workplace and demand they pay you. The law also prohibits you from publicizing the debt, too, so even though you want to go on Facebook call out someone that owes you money – don’t. Here is the caveat: You may, respectfully, call the customer at work but you cannot let the other workers know that you’re trying to collect on a debt. Plus, if the customer asks you to not call them at work, you legally must comply.
  2. Don’t harass your customers. See #1. But actions such as repeated calls, threats of violence, and extreme language are not only bad form, they’re illegal too. For a small business owner, it feels personal when someone doesn’t pay. But conducting yourself in a professional way will pay off in the long run.

There are rules about pursuing debt collections – make sure you follow them.

  1. You can’t arrest the debtor. Sorry, we know this may not feel fair, but if a customer is 90-days past due, you cannot call 911 for help. However, there may be legal actions you can take in certain circumstances.
  2. You cannot pursue the debtor for things they don’t owe. This happens a lot when the data you have on the customer is inaccurate. So many times we see that the person already paid the debt but the information wasn’t logged properly. A simple mistake can land you in hot water, so use caution and double-check the facts before pursuing a debt.
  3. You cannot call at odd hours of the day and night. Did you know there are rules that state you can only call a past-due customer between 8:00 am and 9:00 pm? For small business owners that work hard all day, this means just because you’re up at 7:30 am you can’t squeeze in a few collections calls.

If you’re worried about running afoul of the rules of collecting debt, you don’t need to.

Contact me today at 888-780-1333, and I’ll show you how to collect more money, cut costs, and stay 100% compliant with all of the many laws and regulations that relate to debt collection.

After all…it’s your money!  Keep more of it!!

All You Need To Know About HIPAA Business Associate Agreements

18 Aug

Source:  Jeff Broudy, PCIHIPAA

Medical and dental practices are hearing more and more about large fines and data breaches surrounding HIPAA (Health Insurance Portability and Accountability Act of 1996).   Many are fearful that significant fines could affect their practice, their patients, and their livelihood.  Is this a real threat?  I believe it is.  HIPAA law is confusing and protecting the security and privacy of your patient information is critical.  And with the enactment of the Omnibus Rule back in 2013, HIPAA compliance now extends to your Business Associates.

The Ponemon Institute states that 39% of all Business Associates have experienced a data breach, and in one case a practice was fined $31,000 for not having a Business Associate Agreement on file.  That’s an expensive document!

As HIPAA Compliance Specialists, a day rarely goes by that we don’t receive questions about Business Associates.  “Who’s a Business Associate?”  “Do I have risks if I don’t have execute the proper agreements?“ What does my practice need to do?”  In fact, out partners at PCIHIPAA created a HIPAA Webinar Series for our clients to help answer these questions.  Let me know if you would like more information on this webinar series, and let me help clarify some of these questions.

) “Do I need to have a Business Associate Agreements on file?”

Yes.  If you are a Covered Entity under HIPAA, you are required to execute Business Associate Agreements. The Health and Human Services website (HHS.gov) defines a Covered Entity as health care providers who electronically transmit any health information in connection with transactions for which HHS has adopted standards.

Bottom line:  Examples of Covered Entities under HIPAA are: Doctors, Clinics, Psychologists, Dentists, Chiropractors, Oral Surgeons, Podiatrists, Opthamologists, Nursing Homes, Pharmacies, Health Insurance Companies, HOMs, Company Health Plans, and Labs are all considered to be Covered Entities.

2) “Then, who is a Business Associate?

A Business Associate as any organization or person working in association with, or providing services to, a Covered Entity who handles or discloses Protected Health Information (PHI) or Personal Health Records (PHR.)  A business associate may also be a subcontractor that creates, receives, maintains, or transmits PHI on behalf of another business associate.  Think of it this way, if you contract with a person or an entity that needs access to your PHI to do their job, they are most likely a Business Associate.

Bottom line:  Examples of Business Associates are Lawyers, Accountants, IT Programmers and Representatives, Shredding Companies, Marketing Software Companies, Practice Management Software Providers, Data Backup and Storage Companies, and Billing Companies.   

“Are there exceptions?”

Yes.  HIPAA excludes conduits of information (UPS, FedEx), governmental agencies (Medicare and Medicaid), and anyone else this is not required to handle your PHI to do their jobs (Janitors, Landlords, Water Delivery Services).  Also your employees are not considered Business Associates.  They need to be trained on HIPAA, but you don’t need to execute Business Associate Agreements with your employees. 

3) “What exactly is a Business Associate Agreement, and why is it important?”

A Business Associate Agreement is a binding legal document that is now required under HIPAA for you to execute with all of your Business Associates. It is imperative that your practice has Business Associate Agreements in place, with a log kept for reference. Because your practice (as a Covered Entity) is sharing PHI with your Business Associate, this document ensures that the HIPAA mandates are in place and that your patients are protected.   If you use the right Business Associate Agreement, it also includes an “Indemnity Clause.”  The Indemnity Clause protects you financially, if PHI is compromised under your Business Associate’s watch.  This is a crucial clause that should be included in any Business Associate Agreement you execute.

Contact me for more information and/or assistance in creating a Business Associate Agreement (BAA) for your practice.

Click Here to take a free, no-obligation, HIPAA Risk Assessment.  The results will inform you of where you are compliant and where you are deficient in your HIPPA security.

How Debt Collection Affects Revenue Cycle in Healthcare

2 Apr

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Debt collection is a hot topic in healthcare revenue cycle circles. That’s because hospitals are facing higher costs, declining reimbursement, along with high-deductible insurance policies and patients that simply cannot afford to pay.

This article looks at how debt collection best practices could improve the revenue cycle in healthcare. What are the issues affecting debt in healthcare?

Debt Collection and Medical Billing 

Medical billing serves at the core of healthcare revenue cycle. But Rev Cycle Intelligence points out the elephant in the room: Medical billing is often riddled with errors.

Simple mistakes in the patient billing record are a challenge in the revenue cycle. Collecting patient information at the front desk lays the reimbursement framework that every revenue cycle is built upon.

When you cull out simple human mistakes, providers are still left with the complexities inherent in billing practices that are unique to every payer. That alone creates glitches in clinical cash flow when reimbursements are submitted and rejected by the payer.

Another problem with medical billing is tied to the healthcare paradigm itself. It is a patchwork of disparate providers – even within a single health system. If the steps to getting paid hinge upon a previous interaction, but documentation are peppered with missing pieces, the likelihood of that provider being reimbursed by a payer drops with every missed checkbox.

A frequent issue that occurs well before the bill is generated is the issue of collecting a patient’s co-pay. Even when the co-pay is $20, the medical practitioner at the front desk may fail to collect it. For clinical administrators, it can be difficult to ask for payment from a sick patient. Now imagine the struggles when a patient has a $2,000 deductible. But failing to collect this revenue up front does nothing to alleviate patient responsibility for their bill. In fact, it almost certainly guarantees the need for debt collection later. Rev Cycle Intelligence states that 90% of the 12.7 million Americans participating in 2016’s open enrollment had high deductible insurance.

InsideARM has been waving a red flag around this issue, citing statistics that say, “The percentage of consumers not paying their total hospital bills will increase to 95 percent by 2020.” Even worse news for hospital revenue cycle, the volume of patients who are only paying a part of their overall hospital bill has declined from around 90 percent in 2015 to 77 percent in 2016.

As bad debt rises, healthcare providers are turning to debt collection agencies to help save their revenue cycle.

Debt Collection Improves Healthcare Revenue Cycle

TSI specializes in debt collection in the healthcare space. With over 45+ years of healthcare collection experience, we use an empathetic approach to collections to protect the patient relationships you’ve worked hard to cultivate. We understand the delicacy inherent in keeping patient satisfaction scores high while still collecting on an unpaid medical debt. That’s why we’ve invested in technology that can help us collect on all bad debt in ways that acknowledge and respond to patient payment preferences across multiple digital venues as well as through more traditional formats.

In addition, our proprietary data analytics platform, CollectX boosts your results by identifying the most liquid accounts and ensuring they receive the appropriate collections activity. Since implementation of CollectX, our clients have seen on average a 22% lift to their liquidation rates. Maintain your patient relationships, while improving your revenue cycle, with TSI.

To learn more about how to optimize your revenue, contact me today at 888-780-1333 or at david.wiener@cashflowstrategies.us.

Money For Your Business, When The Bank Says, “No!”

29 Mar

money

Traditional bank loans can be sluggish and an increasing number of deserving small and medium sized businesses get turned down.  Businesses need funding for renovations, expansion, additional inventory, upgrading equipment, launching a new advertising campaign, or any one of many other reasons.  What can a business owner do when the bank won’t budge?

Merchant funding provides a great alternative to banks for all of these necessities.  Approval is not dependent on your credit score.  Unlike banks, no formal business plan is required, and neither is collateral.

If you can answer “yes” to the following questions, you are eligible to receive between $10,000 and $1,000,000 in less than 1 week!

  • Do you have bank statements for the last 4 months?
  • Have you been in business for at least 1 year?
  • Do you have at least $10,000 per month in gross sales?

In just minutes, you could be on your way to a renovated facility, state-of-the-art technology, and sophisticated marketing campaigns that make your business stand out and keep customers coming through your door.

Get cash in your bank account in as little as 48 hours!

For more information on this and other ways to improve your business cash flow, contact me, David Wiener, at 888-780-1333.

To find out how much money your business could qualify for, click here.

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