How Clean Is Your Hard Drive?

From blue chip offices in London's financial center to a microchip scrap heap, untold numbers of computers will be hauled out to the recycling bin this year. As CBS News Correspondent Richard Roth reports, companies may not realize what they are throwing away.

Jon Godfrey works for Technical Asset Management, a company that refurbishes computer equipment for business clients. "The data that their business used to rely on still resides on those obsolete systems," says Godfrey.

Computer Brain Wash

CBS News Computer Consultant Larry Magid recommends taking one of the following steps to thoroughly eliminate memory from a computer before recycling it.

Use a data elimination utility like Infraworks' Sanitizer or Norton Clean Sweep.

Take your computer to a professional you trust and let them wipe your hard drive.

If you are confident in your computer knowledge and don't want to spend any money, the MS-DOS command FDISK can clear the memory of the computer.

In some businesses an office-full of computers can become outdated in as little as 12 or 18 months. And in every machine ready for retirement there is a huge potential liability. Information like passwords, personal records and company secrets could be stored on the computer's hard drive.

According to CBS News Computer Consultant Larry Magid, clearing a computer's hard drive is not as easy as it may seem. "Just erasing the files is not enough. To obliterate the memory you need to use a special program or get professional assistance."

And while clearing computer memory is easy enough with a little effort and expertise, it's not often done. That is a big mistake, according to computer security expert Neil Barrett. "You've basically written out an invitation for a hacker to come and play inside your network," says Barrett.

A London bank just learned that the hard way, when one of its computers headed for resale was bought by a British newspaper and Barrett was asked to examine it.

"Ive got some personal names here," said Barrett as he looked over the computer's memory. He found it held eight years of account details for a string of charitie as well as over 100 files that mention former Beatle Paul McCartney.

Beyond the embarrassment, data left behind on any used computer is a hazard. "Once I've got your digital identity, I've got you," says Barrett.

Britain has new laws to safeguard data privacy - stricter than laws in America. Even so, the booming market in used computers is mostly unregulated in both places.

"The secondhand computer marketplace in Europe and in the US makes secondhand car salesmen look positively respectable," says Godfrey.

In other words, seller beware. More than a just a machine is changing hands; secrets locked inside it could also be part of the deal.