Every cell phone has certain amount of data that is specific to its owner. If the cell phone is subsequently passed on, then it should be wiped clean of this compromising data. After all, there are certain personal details which its owner does not want to reveal, even to his family members. The same logic applies to office phones, which is at times shared between colleagues. Whether it is personal or official, no one wants to pass on his sensitive data in unknown hands. You can always use the delete function of the cell phone, but this option comes with loopholes.
To identify what could still be found in the cell phone memory after the supposed deletion, we can use a spy tool for professionals called the Paraben’s Device Seizure, which is available on http://www.paraben.com/device-seizure.html. The site offers a trial version for 30 days with the complete version of the forensics tool. And yes, Device Seizure is a tough nut to crack.
After installation, we can plug in current cell phone models to the computer and set the spy tool on the devices. The program creates an image of the cell phone memory that can be subsequently used with the integrated hex editor. We may find deleted contact data and SMSes in few cell phones, which the previous owner had received and deleted.
While tool did not work on all the devices, it is, however, constantly being developed. Thus, the danger of unauthorized persons retrieving your deleted data is very plausible.
To avoid such a scenario, you should ideally first delete the data on the SIM card and then overwrite it. This makes it very difficult or rather impossible for forensics programs to restore the contacts or messages. For doing so, you must use a SIM card reader such as the SIM Card Stick. You can use it to access the SIM card, load the contact data and messages stored on your computer and edit the entries there. It is much more comfortable and even much faster in case of several messages as opposed to editing data using the cell phone menu.
In addition, the software deletes all the existing contacts on your SIM card and overwrites them. Once done, the overwritten contact data can no longer be read.
source: chip.in

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