Hey I was wondering how many of you offer free subdomains with your web hosting services. For example, your company's domain is webhosting.com and you offer subdomains to your clients such as name.webhosting.com. I am planning on discontinuing my subdomain service to clients as I believe clients may actually use these for spam purposes. It hasn't happened yet to my company but I am currently just taking this action as a precaution. What do you guys think? Would this be a good action to take to prevent any future incidents?

I don't think there is any market for those (unless you are in the free hosting business). Everyone wants to market his own domain/brand, not the hosting company's one.

We offer subdomain hosting like you describe at our regular hosting rates. While a tiny proportion of our overall shared hosting, we do find that some people use us as a development environment, or a remote monitoring station, or sometimes they just don't care about having a domain for their forum or blog or whatever.

As for fraud/spam, I'd say the subdomain signup attempts are just slightly more likely to be fraud, and so we've configured our custom fraud blocker to recognize that.