According to Kotaku, selling an Xbox 360 may have dangerous contraindications, unless you remove the hard drive before you do so.
Researchers at Drexel University claim that restoring the console to the factory settings does not delete the user’s personal data. So with a common set of tools, hackers and modders can extract personal information like credit card numbers and others.
After buying a used Xbox 360, the researchers unloaded a basic modding tool and used it to access the operating system files and folders. After some research, they were able to find the personal information of the previous owner, including the credit card.
Ashley Podhradsky says Xbox and Microsoft are doing poor service to consumers by not protecting personal information. “Microsoft does a great job protecting its proprietary information, but it does a poor job of protecting user data.”
To avoid these problems, researchers recommend removing and connecting the Xbox 360 hard drive to a PC, so that software can permanently erase all information. Only then is it recommended to sell the console.