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There’s No Such Thing As a Free (App) Launch

Your grandparents were right. Not only is there no such thing as a free lunch, but these days there's no such thing as a free launch, either. Especially when it comes to free smart phone apps, that is.

That's the lesson some Starbucks customers learned recently when they began noticing that their gift card balances on the company's free mobile app were being sucked away so fast that an outsider might have thought they had suddenly gone on a Frappuccino frenzy.

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As it turns out, hackers had not only gained access to their Starbucks cards through the app on their smart phones, they had also siphoned money from the credit cards attached to the auto reload function on their accounts, sometimes hundreds of dollars' worth, according to reports from consumer/tech writer Bob Sullivan.

In some cases, customers even witnessed the thefts as they received numerous e-mail notifications of automatic reloads and additional purchases being charged to their account in real time, Sullivan reported.

Such thefts are one of the many reasons experts like Identity Theft Resource Center President Eva Velasquez urge consumers to be cautious about downloading free apps. And even some of the precautions they suggest using might not have been enough to prevent the crime because many would have considered the coffee giant's offering to be safe.

"It's very hard to give a blanket statement [saying] never do this or that," Velasquez said.

In part that's because some of the risks associated with the smart phone freebies, which can range from minor hassles like ads popping up on your screen to such major issues as providing user location, are often attributed to companies that either have no track record or have questionable reputations. Not major corporations.

While problems with apps from major companies are likely to be the exception to the rule, there are a few precautions you can take to protect your phone and your privacy, experts say.

1. Know your tech comfort level

Although companies often spell out what information they share and who they share it with in their license agreements, the language can be highly technical and confusing, Velasquez says.

"If you don't have the technical savvy, wait a while before you download so you can do (your) homework."

2. Know who you're doing business with

If you want to download an app for a company like Kohl's, for example, make sure the freebie really belongs to Kohl's. You can often do that by going to the company's website. If they have an app, the company usually prominently features it on its site.

3. Read reviews

Velasquez says a high number of good reviews are a good sign, but not a perfect barometer. Although CNN Money ran the story about problems with the Starbucks app in mid-May, most reviews continued to be positive.

4. Install anti-virus software

Yes, even on your phone. That's especially important if you have an Android device because Android apps are more prone to malware, according to identity theft expert Robert Siciliano.

Velasquez is quick to point out that there are also plenty of useful free apps in the marketplace. In fact, her organization will be launching an app designed to help educate consumers about identity-theft related issues.

"We're not trying to say don't download apps because that's not a realistic position. We want you to be cautious," Velasquez says, adding, "We have to stop thinking about our phones as a phone. It is a small computer and it's tracking a heck of a lot of information because you have it with you all the time. The amount of data that they are collecting provides the ability to create a really robust picture of your behavior."

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