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There are some rogue apps out there! A smattering of reviews might not reveal that as the app may be newly rogue--or the reviews faked. It is said too that Amazon's app store is safer, as they supposedly review everything first.
Originally Posted by Marihoene
Another line of defense---have an anti-virus program like Lookout installed to scan apps automatically before installation.
But frankly, for the most part the problem is not so serious. If you're dealing with major, longstanding folks like Evernote, PowerAmp, TripAdvisor, Aviary, Kindle, Lookout, Facebook, Astro File Manager, Netflix, Zinio, TunedIn Radio, various Google apps, etc......no problem. The permissions listed are often formalities (and if anything, I suspect a lot of them are overly broad to cover their legal butts).
Frankly, I can't always understand why some app asks for some permission or another. For instance, if you download a navigation app, it needs to access your location to have GPS work properly. Why does it need phone contacts? Sometimes, I wonder, too. I imagine if you email them they will have an explanation and it might even make sense---like, well, when you click on the link, it takes you to your Contacts and you can then call the restaurant in question so we have to have access to your phone contacts. I don't worry too much about it if using established apps.