wikipedia, the answer to every question. Everyone knows its dodgy anyway, but its nice to see it in writing
"Thousands of Gratis members have indeed received free iPods and other merchandise, as well as provided pictorial evidence. While the FreeiPods program appears to be legal under United States law, the controversy mainly rests on the morality of the matrix scheme core of the programs. Not only are early registrants more advantageous when obtaining referrals (characteristic of such programs that rest solely on exponential growth),
members of Gratis's programs have posted much spam on bulletin boards and chat rooms violating policy.
In addition, over the last few months (as of December 2004),
an increasing number of Gratis members have been complaining about their accounts being placed on hold or their orders being delayed for no apparent reasons and without notification from Gratis. Gratis representatives have claimed that they have violated their company's Terms and Conditions.
On February 9, 2005, Gratis briefly lost support from TRUSTe due to multiple
privacy policy violations. On February 11, 2005, TRUSTe retracted its complaints. Sometime later, however, Gratis again lost support from TRUSTe, and has since been without TRUSTe's seal.
Complaints against Gratis on file at the Better Business Bureau can be found at [1].
On March 23, 2006,
the Attorney General of New York filed suit against Gratis over the sale of up to seven million user information files (identity with e-mail address) despite a promise of confidentiality to users,
considered to be the largest deliberate breach of a privacy policy on record in the United States.[3]
In May 2006, for the first time, Gratis Internet missed payments to its publisher affiliates, citing payment problems from a major partner."
"People fear that the Gratis network might be coming to an end. In many cases peo
ple are not getting completed orders for Xbox 360, iPods and other items"
http://en.wikipedia.org/wiki/Gratis_Internet
