Not necessarily. No indemnity certificate can protect you and your company from potential lawsuits, embarrassment, bad publicity and loss of goodwill associated with sensitive data exposure. What's more, that data exposure nearly always includes the infringement of software licenses. Indemnity certificates may protect you from environmental regulations, but it may be difficult to prove that your certificates are genuine if your recycling company is no longer in business (a common problem).

Certificates of recycling and disposal are important, but you need to pick a computer recycling firm that can back up their liability protection claims with something more than a flimsy piece of paper. In addition to the standard indemnity certificate, PC Disposal backs its service claims with a $1,000,000 Guarantee.

Maybe, but it's more likely that the low priced computer recycling firms are just lying to you. This may sound harsh, but you need to step back and consider how on Earth these companies can make any money considering how much they charge.

Low-priced disposal companies will try to convince you that they make enough money from reselling your old computers to cover their processing and disposal costs while making some type of profit. This may have been possible years ago, but not with today's computer prices and the glut of used computers that currently exists.

Processing computers for disposal or resell involves many labor-intensive costs (e.g., transportation, warehousing, asset tag removal, sanitizing or destroying hard drives, EPA compliant disposal, etc.). Merely sanitizing a single hard drive can take more than 36 hours. This means that if a computer recycler isn't charging an adequate fee for processing, they are losing money on every computer they aren't able to sell. The more computers they process, the more money they lose.

Now, ask yourself why those recycling firms would bother to properly dispose all of those remaining unsold computers when they know they will start losing money on each and every unit they process. It's more likely that they will either dump your computers into a landfill with the data still on them or dump your unprocessed computers overseas where foreign companies will pay top dollar for them.

For example, we once had a representative from a city government ask us to bid on a computer disposal project. He was impressed with our services, but couldn't understand why we didn't offer the services for free like their last vendor. Of course, we were curious and had to ask why he just didn't use the previous computer recycling company. His answer, "Well, we had a few privacy problems...."

Bottom line: That great offer you received may cost you a lot more than you think. Computer recycling firms will make their money one way or another.

Expect your odds to be 100% against your company. Identity thieves, environmentalists and privacy watchdogs are constantly combing through landfills and wreaking havoc on businesses that haven't properly disposed of their equipment. And extracting private data from hard drives is easy, even if they've been reformatted.

This is the latest profit model that has been developed in this industry. Here's how it works: First, you contract with a national firm to do your equipment removal and disposal. Next, they rush out and try to find someone (often called a "trusted partner) near your location that will pick up and process the computers for them.

This subcontracting model sounds good in theory, but it has some dangerous drawbacks. First of all, no matter what they call them, "trusted" or "certified" or whatever, there's no practical way for these companies to police all of these "partners" across the country. What's more, there's no real motivation to do so. Why? Remember those indemnity certificates mentioned above? They may not completely protect you or your company, but they do a wonderful job of protecting from liability the company you originally hired. That right, the liability just gets passed around. It's one of the reasons this model is becoming so popular.

Now let's look a little closer look at these "trusted partners." The national computer recycling company that you hired doesn't have much choice in who they pick to subcontract their services to. They have to take anyone they can find in the area - often a company that you already rejected. These local firms don't have the technical sophistication or economies of scale that the large recyclers do, so their cost structure is much higher. Plus, they are only getting a fraction of the total revenue because they're sharing that revenue with the national recycler. So how can they do the job properly and still make a profit? (Hint: check your local landfills after the deal is done.).

It certainly seems like a safe decision, but it's important to understand the whole story. Computer manufacturers do not want to be in the computer recycling business, but they've been forced to deal with the incredible amount of e-waste that they generate. As a result, nearly all computer manufactures subcontract their recycling services to "trusted partners." In fact, one of the nation's largest computer manufacturers has been criticized for using prison inmates for computer recycling.

We think that computer manufacturers who create the impression that they do their own recycling gives their clients a false sense of security. You may think that your sensitive data is safe because the computers will be destroyed when in fact the subcontractor may just resell your computers on eBay.

Bottom line: Know who you are dealing with and always deal direct with the end processing company.