Car Insurance Crime

A car insurance claim could be the warning of a forthcoming house robbery

SnipImage(16)We often find emails doing the rounds alerting citizens to all kinds of dangers. Some of these are hoax emails – and others are well worth taking note of.

The Arrive Alive website received an email from a regular visitor with a message and warning of signs of vehicle damage that might well alert us of other dangers. We believe it is important to share this message with our vehicle owners:

“They have a new way to rob you now! What will they think of next!

A friend sent me this email and I am sending it on to my Friends Wednesday, I approached my truck from the passenger side to place my computer bag in the front passenger seat.

As I reached to open the door I noticed there was a hole right under my door handle. My first thought was, “someone has shot my truck!”

I began to think about it and inspect it a little closer and the “light” slowly began to come on. I phoned my friend who owns a body shop and asked if he had any vehicles with damage to the doors that looked like a bullet hole.

“Yes, I see it all the time. Thieves have a punch and place it right under the door handle, knock a hole through, reach in and unlock it, just as if they have a key.
No alarms, broken glass or anything. I then placed a call to my insurance agent and explained it to him I was puzzled that they left my GPS and all other belongings. Here is where it gets scary!

“Oh no, he said, they want the break-in to be so subtle that you don’t even realize it. They look at your GPS to see where “home” is.

Now they know what you drive, go to your home, and if your vehicle isn’t there they assume you aren’t and break in your home.”

He says they will even leave a purse or wallet and only take one or two credit cards.

By the time you realize there has been a theft, they may have already had a couple days or more to use them. I didn’t realize my situation for two full days!

They even give you the courtesy of re-locking your doors for you. Periodically walk around your car, daily if you are in a shopping center or other parking area.
Report thefts immediately…. your bank w/missing check numbers, your credit card agencies, police, and insurance companies, etc.”

( Above is picture of what the hole looks like )

Also view:

Car Insurance and Crime

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SAICB – Business and SAPS working successfully together to reduce insurance fraud

From left to Right : Barry Scott (CEO of the SAIA), Lt Gen. Mzwandile Petros (Gauteng Provincial Commissioner: SAPS), Ronnie Napier (Chair of the SAICB Board) and Hugo van Zyl (COO of the SAICB) at the 3rd Annual “Year In Review” Breakfast of the South African Insurance Crime Bureau on 3 November 2010, JCC Woodmead.

From left to Right : Barry Scott (CEO of the SAIA), Lt Gen. Mzwandile Petros (Gauteng Provincial Commissioner: SAPS), Ronnie Napier (Chair of the SAICB Board) and Hugo van Zyl (COO of the SAICB) at the 3rd Annual “Year In Review” Breakfast of the South African Insurance Crime Bureau on 3 November 2010, JCC Woodmead.

The South African Insurance Crime Bureau (SAICB), working closely with the South African Police Service (SAPS) and the National Prosecuting Authority (NPA) has made significant and positive strides in addressing fraud and crime in the short term insurance industry and is proof of what can be achieved when business and SAPS works together.

The SAICB was officially launched on 31 October 2008 and in just over two years has established itself not only as a valuable tool in the fight against insurance fraud and related crimes, but has also brought the various agencies working in the broader fight against commercial crime closer together to the benefit of all. This achievement and the SAICB successes to date were celebrated at the “Year in Review” Breakfast at the Johannesburg Country Club, Woodmead on 3 November 2010. Lt Gen. Mzwandile Petros (Gauteng Provincial Commissioner: SAPS), served as the Guest Speaker at the event, and explained the focus of the SAPS in Gauteng since his appointment and the challenges to be faced and addressed in the coming months.

The main focus of the SAICB is to address organised fraud and crime in the short term insurance industry, as well as to identify repeat offenders and fraudsters that target multiple insurance companies. For the SAICB to achieve its aim of reducing fraud and crime within the financial industry, it needs to work very closely with the policing and justice entities in South Africa, and to this end, has spent a huge amount of time and resources working with the SAPS, NPA and the Hawks and building the strong relationships that will help them with their mission and vision for the industry.

This close working relationship has resulted in several projects being identified and implemented to assist SAPS in achieving their renewed commitment to tackle crime in all its guises, while assisting the industry in addressing the crime and fraud committed against it.

The SAICB has 9 active cases under investigation currently and has taken 3 cases successfully through the courts and recovered R380 000 for the industry to date, with the assistance of the SAPS and NPA. The approximate value of cases under investigation is R120 million.

Other areas, not necessarily in the crime arena, were also identified where the SAICB could assist SAPS and one of the successful pilot projects launched has been the cleanup of the pound in Isipingo -KwaZulu Natal.

To date over R8 million has been recovered and over 350 vehicles uplifted by the industry. In addition to the industry vehicles identified, the SAICB and SAPS also assisted in identifying nearly 200 uninsured vehicles and contacted the owners of these vehicles to inform them where their vehicles were housed.

Hugo van Zyl, Chief Operating Officer of the SAICB noted, “The SAICB would also like to make special mention of Business Against Crime SA (BACSA) as they have assisted and facilitated the building of the strong relationships with SAPS and the NPA from our inception. Their commitment in getting business involved in assisting SAPS to address the crime situation in the country has led to many initiatives that have over the years helped in reducing crime as well as addressing the unacceptable number of road deaths in South Africa. The SAICB is committed to being a part of this mindset and proof that business and the SAPS working together can make a difference regarding crime in South Africa.”

The SAICB is a section 21, not for profit, company, and has 10 member companies, namely: Santam, Mutual & Federal, Hollard, FRSTIA (Outsurance and Momemtum), Lion of Africa, Standard Insurance, Absa Insurance, Regent, Telesure, and MiWay. The SAICB also manages the industry Fraudline which has proven to be a valuable tool in identifying fraud and as a direct link between the public and the insurance industry.

For further information about the SAICB, our successes and future initiatives may contact Hugo van Zyl on hugovz@saicb.co.za or Melanie Pillay on melaniep@saicb.co.za

From Left to Right: Dr Graham Wright (CEO of BACSA) and Hugo van Zyl, (COO of the SAICB) at the 3rd Annual “Year In Review” Breakfast of the South African Insurance Crime Bureau on 3 November 2010, JCC Woodmead.

From Left to Right: Dr Graham Wright (CEO of BACSA) and Hugo van Zyl, (COO of the SAICB) at the 3rd Annual “Year In Review” Breakfast of the South African Insurance Crime Bureau on 3 November 2010, JCC Woodmead.

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Mini-Budget could help Fight against Car Insurance Fraud and Corruption

insurance-fraudEvery time that the Finance Minister announces his Budget or Medium-Term Budget Policy Statement, South Africans take note.

This statement not only is important for tax advisers and politicians – but for every South African who cares about his own financial stability!

What impact does the Mini –Budget revelations have on the car insurance industry?

The Finance Minister has revealed that there will be new regulations aimed at beefing up the stability of banks and insurers, as well as bringing previously under-regulated products such as derivatives and hedge funds, under a single Financial Markets Bill.

Very important for car insurance companies and consumers who are faced with increased premiums are the steps taken to combat fraud, corruption and other crimes. Crime is a significant contributing factor to rising insurance premiums – and any steps to reduce crime are welcomed by the insurance industry!

Mini Budget Statement reveals increased funding for Police and Courts

Finance Minister Pravin Gordhan announced an increase in funding for the police, courts and military over the next three years. The allocation for the police will rise by an average 7.5% annually, with the bulk going towards improving detective and intelligence services.

“Additional funding over the MTEF period will expand detective services, crime intelligence and crime prevention, especially at the local station level.

“Tactical response teams will be established in each of the provinces over the next three years to conduct medium-risk policing operations and make use of available intelligence to prevent crime,” the document says.

The state’s corruption-busting capacity will also be boosted, with the Special Investigative Unit’s ranks set to increase to more than 650 staff by 2013/14.
The courts’ budget allocation will go up by 8.4 percent annually over the medium-term framework period.

The revised national expenditure estimates for this year includes R320 million for salary adjustments in the department of justice, the National Prosecuting Authority and Legal Aid South Africa.

Conclusion

The insurance industry needs effective law enforcement to reduce car insurance fraud. By reducing car insurance fraud the consumer will benefit from a potential slow -down in rising insurance premiums. We would like to urge all vehicle owners to join the fight against insurance fraud and to report fraudsters!!

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Sportsmen need to check their car insurance if they perform or behave poorly

Sports fans are passionate about the game!!

Sports fans are passionate about the game!!

The usual vehicle related risks of vehicle owners are accident damage and vehicle loss through criminal activities such as hijacking or theft. It is however also possible that vehicle damage could be as a result of some environmental factors such as falling trees or building materials – and then there is also the remote chance of vandalism!

Sportsmen it appears might have to be a bit more alert to the risks of vandalism as passionate fans might vent their frustrations not only through verbal abuse – but also by damaging property!

I have found an interesting story from Associated Press about such an incident in the UK and would like to share this:

“Newcastle United striker Andy Carroll’s chrome-plated Range Rover has been set on fire outside teammate Kevin Nolan’s house.

Security men stood guard outside Mr Nolan’s detached house in leafy Darras Hall, Northumberland, as police examined the charred remains of the luxury vehicle for clues. Mr Nolan’s garage door was also daubed in graffiti in the attack.

Magpies’ star Carroll, who was recently tipped for a call-up to the senior England squad, is staying at team captain Nolan’s house as part of his bail conditions after being charged with an alleged assault. The incident comes a little over a week before Mr Carroll is due at Newcastle Crown Court to answer charges that he allegedly assaulted a teenager in a nightclub.

It appears that this incident might not be the result of poor performance on the pitch –but rather the alleged bad behaviour away from the pitch.”

In the sports environment we always say that class is permanent but form is temporary. Perhaps sportsmen need to take this into account – have their car insurance checked – and rest assured that their vehicles are protected when their form takes a dip!!

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How much can a tracking device reduce my car insurance premium?

Tracking-Devices-reduce-PremiumsThere is no dispute around the effectiveness of vehicle tracking devices in combating vehicle crime!

The South African Police Services recently revealed crime statistics for 2009 – and this makes for interesting reading. There is an interesting note included in the Crime Stats report – and we would like to quote:

“Carjackers mostly differ from the groups above. They are usually part of hijacking syndicates or serve as suppliers to highly organized syndicates at a higher level of organized crime. Most carjackings are committed with the following in mind:

• Exporting the vehicles to another country.
• Cloning the vehicles and re-entering them into the legal market.
• Dismantling the vehicles for spare parts.

To achieve (particularly the first two of) the above aims with hijacked vehicles, requires the involvement of organized crime. It can only succeed with higher level planning, corruption of Police, Home Affairs, SARS and licencing officials and will most probably involve money laundering and multidimensional organised crime.”

The graph that summarizes the crimes related to robbery is:

Robbery Crime Data 2009

Robbery Crime Data 2009

Car Insurance and Vehicle tracking Devices

Car Insurers are very aware of the real risk of property/ vehicle loss through theft and hijacking and are also taking action to prevent such loss. Apart from working closely with the Police Services, the Insurance Crime Bureau and Vehicle Manufacturers – they are also placing a greater emphasis on the installation of vehicle security devices such as tracking systems.

Car Insurers are also offering to reward vehicle owners who have tracking devices installed by offering discount/ reduced car insurance premiums.

Broadly speaking, a car insurance premium is mostly made up of an accident risk portion and a theft risk portion. Generally there is a far higher risk of a car being in an accident than being stolen resulting in the accident portion being far higher than the theft portion. This ratio between accident and theft would obviously change if the vehicle is more prone to being stolen. A Tracking Device would only have an effect on the theft portion of the car insurance premium, i.e. the smaller portion.

I have approached a few car insurance companies – and would like – without reference to the specific brands, to share some insight pertaining to how this is approached:

• Some insurance products developed around the principle of Pay As You Drive – have these tracking devices as an integral part of the insurance product and calculation of the insurance premium.
• Some insurers require the installation of a tracking device for some “high risk” vehicles even before offering to insure such vehicles.
• One insurer has revealed that the average discount is around 2.5%. It varies between 0% (when the minimum premium gets applied) and 15 % (a vehicle with a high theft risk).
• It is important to note that in the one example the discount is 33% that get’s applied to the theft portion of the premium, which is usually very small. Thus, the discount on the final office premium will depend on the size of the theft portion relative to the total risk premium, and the size of the risk premium relative to the fixed expenses.
• Another insurer preferred not to reveal specific amounts but confirmed that the premium is definitely cheaper on account of the reduced risk.

Communications with car insurers on tracking devices

Where you purchase your car insurance and your vehicle tracking device should not be seen in isolation. It is important to communicate with both your tracking service provider and your car insurance company to confirm whether the tracking device is “accredited” as such by the insurance company and will reduce your car insurance premium.

If this does not offer you a saving – it might be worthwhile to shop around a bit more for either the tracking device or the car insurance policy. It might also be important to carefully read the terms and conditions of your emergency assistance agreement or the car insurance policy to ensure that you are not bound for a specific term and liable for payment of penalties on early withdrawal.

Also confirm pricing of premiums and ask what the difference would be in premium payable with or without the tracking device! The installation of an effective tracking device will however do more than reduce your premium – it might make your vehicle less of an target, provide peace of mind and avoid much agitation having to deal with insurance claims and car dealers!!

B20 Hollard_PAYD_418x90

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Keys, Hijacked Vehicles and Car Insurance…. What do we need to know?

Keys-Hijacked-Vehicles-and-Car-InsuranceWe often advise and caution our vehicle owners on the need to protect their vehicles from vehicle loss through theft and hijacking.

We have given much attention to vehicle security systems and tracking devices – but we might also need to address some aspects pertaining to once the vehicle has been recovered.

What do we need to know about the keys to the vehicle, 2nd time hijackings and the effect on car insurance?

The Arrive Alive website received a very interesting email from a visitor and we would like to share this request for assistance and the responses received:

Question:

We were hijacked but with the assistance of Metro and Tracker recovered the vehicle. Found the vehicle locked on the side of the road. What is the percentage of people being hijacked for the second time and should we replace the locks or can I use the spare key as the original key was taken?

Answer:

We referred this to driving specialist Rob Handfield- Jones and received the following reply:

“I don’t think there are stats on ’second-time hijackings’, but it can be expensive to replace the lockset on a modern car. I’d approach your insurers with your concerns, see what their opinion is, and see whether they would be prepared to replace the locks.”

We would like to agree with Rob – and confirm that we have not found statistics on the number of 2nd time hijackings. It would however be advised that the locks be replaced as duplicate keys might have been made and you would not wish to test the performance and service delivery of your vehicle recovery service!

Lost keys, replacement of locks and car insurance

We have also referred the question to Shaun Neuhoff from Hollard Pay As You Drive to enquire about the consequences for your car insurance. He responded as follows:

“The loss of keys, specifically resulting from the hijacking, will typically be covered under a motor policy and will therefore be paid for by the insurer, including new keys and the re-programming of the vehicle for the new keys. Obviously, each insurance company has its own limitations and excesses so the client would need to check with their specific insurer as to what their benefits are.”

These suggestions were shared with our website visitor and we received the following response and confirmation:

“Thank you. Yes it will be covered we only pay the excess.  Thanks for all the assistance”

[Note: Excess]

An excess is the first amount payable by you in the event of a loss, and is the uninsured portion of your loss, so when you submit a claim you’ll have to pay an excess. It usually has to be paid to the garage fixing your car once it is repaired before you can drive it away. [Car Insurance Glossary]

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Many vehicle owners lie to find cheaper car insurance

Do-you-lie-to-find-cheaper-car-insuranceWould you lie to save on your monthly car insurance premium? We have written many blog posts on car insurance fraud and how this blue collar crime is increasing the car insurance premiums.

This most often focuses on fraudulent statements made at the time of making the car insurance claim.

These lies are usually related to disclosures of the following:

• Details of the driver at time of the accident
• Details of security features active during time of vehicle theft/ alarm systems etc
• Details of how the vehicle was lost or suffered damage
• Details of where the vehicle was parked, etc

These lies are most often motivated by fear that the accident claim could be rejected on account of the vehicle owner not complying with some of his obligations under the policy contract.

It is however also at the time of purchasing a car insurance policy that many vehicle owners resort to making untruthful statements/lies! It is important that we focus on the dangers of these fraudulent statements and warn consumers about the possible consequences.

Research in the UK on car insurance lies

Recent research in the UK has made available some shocking revelations:

• 38% of UK drivers have admitted lying to get a better premium.
• Men are more likely to be dishonest than the fairer sex, with nearly half admitting to fibbing to get cheaper cover.

What do they lie about?

• Drivers are most likely to lie about annual mileage (14%)
• Where they keep their car (8%)
• The value of the car (7%)
• Adding named drivers onto policies whom the owners suspect will never drive the car.

What motivates vehicle owners to lie when purchasing car insurance?

• 71% of those who lie on their car insurance (http://www.confused.com) applications say that they do it to save money
• 12% consider it worth the risk of having to pay out in the event of the accident to save on their premium.

Conclusion and advice

We would like to recognize and quote from Confused.com who made available these interesting research findings:

Will Thomas, head of motor at Confused.com, says: “When it comes to motor insurance, lying really doesn’t pay. By failing to tell the insurance provider your true circumstances you are risking invalidating your cover entirely, which ultimately means you are uninsured. Whilst it’s easy to think you will never be caught out, insurance companies are getting savvier, particularly in these hard financial times, and lying is a type of fraud. Having your cover invalidated not only has ramifications for you and the repair of your car, but also for any other driver involved in the incident – there is no limit to the costs that may be incurred in the event of an injury”

Perhaps keeping a clear conscience and acting with integrity in business dealings do count for more than a few rands in savings on your monthly car insurance premiums.

Do not tell the truth merely because you are afraid of your claim being rejected – tell the truth because it is the right and honourable thing to do!!

We would like to urge all vehicle owners to view the following:

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What is number plate hijacking?

Written on October 3rd, 2010 by jonckie@arrivealive.co.za
Categories: Car Insurance Advice, Car Insurance Crime, Road Safety

Hijack - numberplateWe have found many references recently to hijacking – even the hijacking of company names. On the Car Insurance Blog we are more concerned with advice to vehicle owners that should assist them to protect them from vehicle loss.

During last week a regular visitor to the Blog sent an email with the short reference “Not sure if this is a valid warning?” There are indeed many myths and urban legends doing the rounds in emails – and we need to be cautious when reading and analyzing the contents.

We have however earlier in 2010 referred to this topic in a blog post titled “Be alert to the threat of number plate hijacking” – and since there has been several reports of this technique to hijack vehicles, we would like to provide some exposure to this again.

We would like to quote:

“Number plate hijacking is an innovative way that hijackers use to approach the unsuspecting vehicle owner and take his vehicle from him!

These hijackers will stalk you to a parking lot or mall, after parking your vehicle, they remove your number plate and wait for you to drive off. They then follow you and overtake you displaying your number plate at their window as if you had lost it and want to give it back to you.

Shocked that your number plate has fallen off your car, you bring your vehicle to a halt to get it from them. This is all they want you to do and by the time you realized what happened it is too late, your car was hi-jacked or you could have been raped/killed.

Please don’t just stop for anything; a number plate is valueless compared to your life.

Think what is happening before you react to it.

Criminals are clever and cunning but are ruthless in getting what they want…

We would like to urge all road users to be vigilant and alert at all times!”

Visit the Arrive Alive website for info on:

* Hijack Prevention Guidelines
* Protecting yourself against hijackings

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South African Insurance Crime Bureau fights fraud through ensuring reliable reputation of associates.

insurance-fraudThe SAICB has developed the database to accommodate the requirements of the SAIA Code of Conduct, and the first requests from member companies to vet new associates have already been received and processed.

The initial vetting requests have already proven the worth of the process and the SAICB anticipates that this will become a valuable tool for insurers to ensure that the associates being appointed have a reliable reputation in the industry.

The following clause on page 16 of the SAIA Code of Conduct refers:

11. Fraud and improper conduct

Members of the SAIA are unequivocally opposed to fraud and improper conduct, and will do everything in their power to identify, verify, investigate and prevent such behaviour.

SAIA members will follow the following standards in this regard:

11.1 Insurers

All insurers are expected to participate in combating fraud and improper conduct.
Should an insurer cancel a contract with an associate due to the fact that that associate was found to have acted fraudulently or in an improper manner, the following procedure will be followed by the insurer:

• The insurer will inform the customers of the associate about the cancellation of the contract between the insurer and the associate, as well of the options available to the customers including retaining their current policies with the insurer directly or through another associate, or moving their business with the Associate;
• Inform the South African Insurance Crime Bureau (SAICB) of the cancellation of the contract with the associate and the reason for it;

11.1.3 Should an insurer be approached by an associate with a book of business, the insurer will establish with the SAICB

• whether another insurer has notified it about the cancellation of a contract with that particular associate due to the fact that that associate was found to have acted fraudulently or in an improper manner.
• Should the insurer find out that that associate had in fact been referred to the SAICB, the insurer should not accept business through that particular associate.

11.2 Insurers’ employees and associates

11.2.1 In dealing with policyholders, there should be a presumption of innocence until the facts indicate otherwise.

11.2.2 Investigators, loss adjusters and assessors will treat policyholders with respect at all times and will not harass, intimidate or threaten policyholders at any time during an investigation. Insurers will include this provision in their third party supplier agreements.

11.2.3 Insurers will request access to relevant information only when investigating potential insurance fraud, and will treat any personal information in terms of the relevant privacy laws.

11.2.4 When sharing information regarding insurance fraud, such information will only be shared for the purpose of combating crime as it is highly prejudicial.

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Cautious optimism for vehicle owners with release of SA Crime statistics

crime statisticsThe Crime Statistics for South Africa were released yesterday. These crime numbers are not anything to be proud of – and remain much too high – but there are some positives that we might be able to reflect upon!

Crime in South Africa by the numbers

There were several declines in the crimes reported and recorded:

• The murder rate has showed its largest decline since 1995, falling below 17 000 for the past year.
• There were 16 894 murders in the year ended March 31, compared to the 18 148 murdered the previous year, representing a 7.2% drop in absolute numbers and 8.6% in the murder ratio to 34.1 murders per 100 000 South Africans.
• The number of attempted murders dropped by 4.9%, from 18 298 cases to 17 410 cases.
• Sexual crimes, which now include the rape of men and pornography, fell 4.4% to 68 332 cases and resulted in 26 311 arrests.
• A total of 64 670 people were the victims of street robberies, a drop of 10.4% on the previous year.

Unfortunately there were increases in house and business robberies of 1.9 and 4.4% respectively.

Vehicle related crimes and Car Insurance

For the purposes of the Car Insurance Blog we need to place a special focus on vehicle related crimes:

• There were 13 902 car hijackings, which represented a 6.8% decline on the previous year.
• Gauteng and KwaZulu-Natal were the worst affected with 7 444 and 3 715 cases respectively.
• Both provinces showed decreases compared to the previous year, of 2.8% and 8.5% respectively.

Also important is to not that there were decreases were in cash-in-transit heists, down 7.3%, with 52 arrests, and bank robberies, down 8.8%. Many vehicle owners are at risk when these criminals disregard the Rules of the Road in their efforts to get away from the scene of the crime…

Drug Related crimes, Road Safety and Car Insurance

Drivers also face the risks of accidents and car insurance claims when they share the roads with other drivers who are intoxicated or under the influence of drugs. It is alarming and a cause for concern to find that drug related crimes have increased:

• Drug-related crimes went up by 17 668 cases to a total of 134,840, with 44.8% of them in the Western Cape. In 2004 there were 62 689 drug-related offences.
• Driving under the influence of drugs or alcohol also increased with 62 939 cases, against 56 156 last year.

Conclusion

These numbers are closely scrutinized by actuaries at insurance companies. They will consider these numbers and pay close attention to the statistics for each region and build this into the model to calculate car insurance premiums.

We can be cautiously optimistic that favourable numbers to be achieved through more effective law enforcement could apply the breaks to fast rising car insurance premiums!!

Also view:

Car Insurance and Crime

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