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Why does a red block with the first letter of the address list list appear when I am trying to address an e-ma?

When I try to address an e-mail, The address won't come up unless I hit the 2nd character from the address list.. anthing@yahoo.com Old classic only needed the first character a - anything.com, now I have to hit an - anything.com. If the contact list has a nicknname when I try to address I get a red block with the first character of the address. Do I have to go through the whole contacts list and delete all the nicknames?

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