It's been well known for years that discarded computers and hard drives often reveal the secrets of its former owner. However, now that mobile phones are becoming more like pocket-sized computers, it's worth recognizing that discarded mobile phones may reveal just as much. The question, though, is how much does it really reveal. The AP piece here is clearly a bit of PR for a company that does mobile security. They went out and bought a bunch of used phones and dug up the info that was on them. They admit, however, that most of the phone owners did at least try to hide the content on the phone, but with some software they could recover it. As for what you should do if you have sensitive info on your phone? "I'd run over the phone. Maybe give it an acid bath." Now you know.
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