Thinking of selling your old phone after buying the iPhone 5? Just be careful

A large number of users are choosing to cash in on their high-value smartphones by recycling them.

According to price comparison site CompareMyMobile, the recycled mobile phone business is expected to grow by twenty per cent to 18 million units by the end of the year - thanks in large part to the high number of iPhone handsets that are expected to flood the market in the run-up to the launch of iPhone 5.

Recycling phones might be a fast way to earn extra cash but many sellers could also be unintentionally giving away highly sensitive data. Personal emails and photos are not the only information at risk- corporate data is also extremely vulnerable to theft.

According to a recent survey conducted by ICM Research on behalf of Kroll Ontrack, 10 per cent of employees in Britain already carry work data on their personal mobile device - one that could easily be sold on eBay for some extra cash to purchase an upgrade in a few months’ time.

The average smartphone owner stores more than 2.2GB of data on their handset which is typically packed with highly-sensitive information - from contacts and photographs to credit card information, corporate documents and passwords.

Regular online purchasing, mobile banking and app downloads can also leave a trail of encrypted data.

Nobody wants their sensitive information to fall into the hands of a stranger but most users are doing just that.

Unfortunately clicking a delete button or removing a SIM card before recycling their handsets does not safeguard the information saved on the phone, leaving personal information easily accessible by the next owner. Permanently erasing data does require a bit more work.

Retrieving information is easy for professionals, and as unbelievable as it might sound, it’s not only possible to recover files that are deleted but also to retrieve data from damaged handsets or from formatted or corrupt volumes – even from initialised disks.

Tech savvy criminals can already hack into a social networking account - steal ATM codes and other personal data- without even touching a handset. And they are causing havoc along the way.

The Ponemon Institute estimates that six out of every 10 cyber-security breaches now occur via a mobile device and malware targeting smartphones has increased by 100 per cent in the last year.

Imagine how much more data could be stolen if a hacker bought a recycled phone from a reseller site like eBay?

While only a few criminals have the skill to retrieve stored data, the impact of their actions can affect millions of people. The recent discovery that two men were responsible for stealing data from eight million mobile users in South Korea is a perfect example of this.

Smartphones have different settings depending on the model so users should follow the specific steps in the phone manual to erase their data records successfully. Many resell mobile websites also provide a list of general instructions that users can follow.

Taking the cautionary steps to eliminate data properly and to keep it away from criminals is crucial to protecting the data-obsessed mobile industry, which continues to grow rapidly.

Research at Ofcom shows that 39 per cent of all UK adults currently own a smartphone; by 2014, 90 per cent of mobile users will have no choice but to own smartphones as most phone providers are moving towards this platform of choice.

And if trends continue, many of these smartphones will end up recycled as consumers forever upgrade to the latest gadgets. Resellers just need to remember to erase their data before they part with their phones.

Robert Winter is Chief Engineer at Kroll Ontrack UK. Robert is responsible for all operations within the area of disaster recovery in the Kroll Ontrack labs, based at the UK headquarters in Epsom.