Agreed, you can never be 100% certain with third party apps.
Best bet is to Google for info and reviews first, chances are if the app has issues or contains malware it will have been reported. It's also a good idea to download it straight from the developer's site rather than someplace else.
Overall just use common sense, if you don't have a good feeling about a particular app then stay away. Chances are you're right to be wary and there will be other apps that do the same thing.
This is one area where Android lags behind iOS. iOS's permissions are pretty user friendly - you can disable access to contacts, calendar, photos, etc., for any app. It still allows app to work, but without the features that require that access.
I wish Android would adopt a similar permissions model.
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