You're on a social networking site checking out what's new with your friends when a pop-up ad informs you that you were selected as a winner of a free X-Box 360! It tells you that you were visitor number 1,000,000 or had a lucky IP Address. You click on the ad, fill out the form and you're ready to receive your prize. The site informs you that as soon as you pay for the $7.99 shipping, the item is yours! You don't even hesitate to type in your credit card number, as you're already planning which weapon you will use to cut up virtual zombies.
Unfortunately, the "shipping" charge ends up being a little more than you thought. Oh, and the X-Box 360 isn't coming. Another variation is that if you want to receive the prize, you will need to subscribe to a few magazines, for a discounted price. When you get your credit card bill, you will be charged for these subscriptions, either as one-time fees or on a monthly basis, but again, no X-Box.
How to avoid: remember that very few things are free on the Internet. You will end up paying one way or another. One more thing to note is that if you win a prize, you generally shouldn't have to pay anything for that prize.