Tuesday, July 24, 2007

Amp'd Customers Were a Collections Nightmare


Amp'd customers were heavy data consumers. Unfortunately, they also tended not to pay their bills. Amp'd apparently experienced an unprecedented growth of subscribers between November 2006, and February 2007 after running ads on MTV about the wireless phone company's lineup of mobile music and video content.

"Approximately 90 percent of the debtor's customers were on 18-month service contracts," according to Amp'd. By May this year, the number of nonpaying customers reached 80,000. That's nearly half of Amp'd's current customer base of 175,000 subscribers.

The filing in U.S. Bankruptcy Court in Delaware, which says the company owes more than $100 million to creditors, including Verizon Wireless. Since Verizon is one of the largest creditors, it might make sense for Verizon to salvage something out of the mess, and acquire the 50 percent of customers who actually do pay their bills, and exhibit behavior Verizon wants to encourage.

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