Have you seen ads like this on the internet and wondered if they're for real?

Well, they're for real, but I don't advise signing up for this kind of deal. Here's why...

When you see any "free" offer, you should be very careful. Very few things are really free. You should ask yourself these kinds of questions:

Question:

An ipod costs $69 to $399 dollars. How are they paying for it if they're giving it to me for free?

Answer: You have to give them something of value.

Question:

What do I have that's valuable to them?

Answer: A lot.

• Your personal information - you have to give them your name, email, home address, gender, date of birth, and phone number. They use this information to send offers to your email account, to your home via direct mail, and to your phone with telemarketers.
• Your credit card - you also are required to sign up for one of the offers they present to you. All of these offers will involve giving them your credit card number. The offers are things like a Blockbuster online rental membership, DVD and music clubs, credit card offers, ringtones & horoscopes. They are paid a bounty from these companies when you sign up. Companies will pay anywhere from $10 - $70 per sign up.
• Your friends and family - in order to qualify for the free item you have to get 5 friends or family members to sign up AND request one of their offers.

See how the money is now adding up? The company will receive possibly $40 per sign up which equals $240 (6 users x $40).

Were you worried they weren't going to make any money on this deal? Don't worry, they will still make more.

In fact, Eliot Spitzer, the fireball New York Attorney General has recently filed suit [2] against Gratis Internet, the parent company of sites Freeipods.com, FreeCDs.com, FreeDVDs.com, and FreeVideoGames.com (just an aside - "gratis" means "free" in Spanish).

The suit alleges that Gratis:

"... sold personal information obtained from millions of consumers under a strict promise of confidentiality.

From 2000 through 2004 Gratis made numerous explicit promises to the users of its web sites about protecting personal information. Among the promises the company made were:

'We will never give out, sell or lend your name or information to anyone';

'We will never lend, sell or give out for any reason your email address or personal information';

'We at [Gratis web site] respect your privacy and do not sell, rent or loan any personally identifiable information regarding our customers to any third party'; and

'Please note that we do not provide your E-mail address to our business partners.'

Even on its sign-up pages, Gratis promised consumers that it 'does not . . . sell/rent emails.'

However, the Attorney General’s investigation confirmed that Gratis’s owners, Peter Martin and Robert Jewell, repeatedly violated these promises during 2004 and 2005 by selling access to lists of millions of Gratis’s customers to three independent email marketers. The marketers then sent hundreds of millions of email solicitations to those users, on behalf of their own customers. In each of these deals, Gratis wrongfully shared between one and seven million confidential user records.

This is believed to be the largest deliberate breach of a privacy policy ever discovered by U.S. law enforcement.

Need another reason to avoid offers like these?

Here's a good one - if you jump through all their hoops and qualify for your free ipod, you'll have to send them an IRS W-9 form, since the iPod's value will have to be counted as revenue.

What information is provided on a W9? Oh, only your name, address, and Social Security Number. Is that the kind of information you want in the hands of these people? I don't think so.
Save your pennies and buy your own stinking iPod. That's what I recommend.