Your old cellphone may be a gold mine

When you upgrade your cellphone, you might get a little cash by recycling your old one. However, you need to watch out. You could be handing over personal data that's really sensitive, even if you think you deleted it.

"There is a little bit of gold in your phone," says Seth Schoen, a tech expert with the Electronic Frontier Foundation, and he's not kidding about gold in phones. They can actually be melted down for precious metals, or recycled and re-sold. "You might think that your phone is so old and obsolete, but there is probably someone who still wants to buy it."

Here's the proof. 7 On Your Side obtained a box full of unwanted phones -- old Motorolas, Blackberries, and an iPhone with a smashed screen.

"If it doesn't work, there is the possibility that somebody would like to disassemble it for parts," says Schoen.

Sure enough, several websites promised at least a little cash for our rejected devices. offered $20 for a blackberry. offered $17. The old Motorola fetched only $1 from Our smashed iPhone 4 got the biggest offer -- $81 from

However, Schoen warns this can be risky. "The biggest concern is always a privacy concern."

As he points out, you don't know who will eventually wind up with your phone, and there's a lot of personal information in there -- pictures, contact numbers, text messages, banking, and GPS tracking software that remembers where you went.

"The cellphone is sort of turning into a catch all depository of personal information -- communications, records of where you've been," says Schoen. "Thinking of that falling into someone else's hands is kind of a disturbing thought."

That data could be a treasure trove for an identity thief. Schoen advises to wipe it clean before you cash it in. "I would be wary of sending my used phone to a service that would end up putting it in the hands of someone I didn't know." Plus, he warns that deleting files doesn't mean they're really gone since there are lots of ways to recover lost data.

Schoen showed us the best way to protect yourself. First, reset the device to its factory condition. Go to settings, look for "Factory Reset" and follow the steps to erase all content. You should also remove the SIM card and the SD card which store data, too.

Now everything's back the way it was at the factory. So you're safe, right? Schoen warns, not necessarily. "The difficulty is that there's software that can be used in many cases to undelete those things,"

He says a determined hacker may be able to find software to undelete what you've wiped off. Still, that would take a lot of effort.

"The curiosity of the subsequent user is probably the biggest source of risk," he says.

The recyclers all promise they will delete your personal data before reusing the phone. However, even they say it's best to clear all your data before you send it in.

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