Security & Fraud

Smartphones Resold, Recycled With Personal Data

Upgrading to the latest and greatest mobile phone is all the rage around the world, but what many consumers don’t realize is that they are leaving a treasure trove of data behind that can help hackers steal their information and thus everything in their bank accounts.

According to Chargebacks 911, the redemptions and loss recovery company, 72 percent of Americans own a smartphone, with users replacing them every 29 months. As a result of all that upgrading and replacing, Chargebacks911 said millions of mobile phones are resold, recycled or disposed of with a lot of personal data that owners leave behind on their phones. What’s more, the research firm found security measures to protect the data have done little to stop the hackers.

“Fraudsters are persistent; if one source of illicit income goes away, they simply find another. And given the amount of personal data left on used smartphones, these devices can provide a veritable treasure trove of information for enterprising criminals,” warned Monica Eaton-Cardone, cofounder and COO of Chargebacks911. “Fraudsters can use this data to commit identity theft, whether it’s opening accounts or loans in the owner’s name, ordering merchandise or services using the owner’s stored login details or scamming contacts by posing as the owner. Even photos and videos can be sold to porn sites or used for blackmail and extortion.”

In order to protect themselves, Chargebacks911 said consumers shouldn’t rely on deleting files or conducting a factory reset of their device, since both measures won’t remove all the data. Instead, the firm urges smartphone owners to use passwords on their mobile devices, wipe all data from it and remove the storage card before turning it in. It also said it’s up to businesses to make sure the phones are wiped clean.

“Smartphone owners need to be proactive about protecting their data, but businesses have a responsibility to do so as well,” noted Eaton-Cardone. “Companies that provide cell phones to employees should always wipe all data before reissuing or reselling those phones, and merchants that sell or trade used mobile phones should take care to ensure that no data remains. Otherwise, they could potentially be held liable if that data is compromised. With fraudsters continually looking to exploit weaknesses, it’s critical to raise awareness of security risks, and it’s up to consumers and businesses alike to take steps to prevent them.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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