According to Kotaku, those of you who sold your Xbox to other people, or even to GameStop, may have just sold your information as well. Apparently, even doing a factory reset will not help you remove the old information in the console. Researchers from Drexel University found that by using common tools, any modders and hackers can get your personal information and credit card number.
The researchers bought a used Xbox from an authorized Microsoft retailer. With a few basic tools and software, they were able to access folder and files in which they were able to extract personal information and credit card numbers. They contacted Microsoft about this issue but declined to comment about it. The students say they are casual gamers and not at all hackers or modders of consoles. That means in a hand of a seasoned modder or hacker, no information is safe.
Kotaku also linked to a site that can clean your hard drive before you sell it to a store or another person. The link is located below. I’ve used this software before when I sold or gave away some of my customized computers to family members and friends. This works pretty good. I’ve never used this software on an Xbox before, but I’m guessing once your Xbox hard drive is connected to your computer, you can use it just like any other hard drive attached to your computer.