Nontraditional IT Asset Disposal – Disposing More than Computers

By David Bernstein, AnythingIT

Spending on technology is the second largest expenditure of most companies. Given the significant amount spent on IT resources, many organizations have yet to realize that all IT assets need to be managed like any other business unit within the organization. The International Association of IT Asset Managers (IAITAM) says that IT asset disposal best practices mandate that: “Policies and standards must be set that govern the use and acquisition of such assets and their success must be carefully monitored. Poor management of software and hardware assets can cause IT budgets to sky rocket and in some cases, cause companies to be in non-compliance of state and federal laws. “

According to the EPA, over 112,000 computers are discarded every single day. That’s 41.1 million desktops and laptop computers per year. And that’s just here in the U.S. and not including computer monitors. We toss over 100 million cell phones in the trash every year, with only 13% of electronic waste disposed and recycled properly.

IT managers in every size company are becoming aware of the problem of e-waste disposal. The numbers vary greatly, but a larger percentage of computers are recycled today than were recycled even five years ago. Manufacturer take back programs contribute greatly to this fact, but the tightening of America’s corporate belt has meant that IT departments continue to look for a financial return for their equipment investment. Added to that is the growing popularity of the green movement; and corporations and government agencies are more often looking for IT disposal vendors with zero landfill policies.

Even with the growing awareness among IT Asset Managers of the importance of proper computer disposal, the consequences of ignoring the disposal of nontraditional IT assets is often forgotten. Printers, copiers, fax machines, servers, telephone equipment, cash registers, hand scanners, and ATMs are all electronics that have value, and the environmental ramifications of improper disposal are enormous.

Why are Fax Machines still so Popular?

The printer and copier market has developed right along with the computer market. According to Global Industry Analysts, the world printing machinery and supplies industry is expected to exceed $21 billion by 2015.

It seems logical that the fax machine would not have as big of a success as other printers. With all of our digital advancements, the fax machine should have gone the way of the floppy disk, but worldwide fax machine sales are regularly hitting the six million mark every year. It is estimated that there are still 131 million fax machines in operation around the world.

Businesses will hang on to fax machines because it is an approved way to communicate under government laws like HIPAA. Under HIPAA, organizations can communicate via electronic communications, but strict levels of encryption and security standards must be satisfied. HIPAA gives businesses the choice to jump through several e-mail security hoops, or to simply send a fax. Interestingly enough, HIPAA only applies to the US healthcare industry, but a strict e-mail communication regulation from the government in one field is enough to motive other businesses not to throw away their fax machines.

The challenge with disposing of fax machines, printers, and scanners is that most IT departments don’t refresh that part of their inventory often. So, when negotiating for new computers, other IT equipment usually remains until a replacement is needed. At that time, it’s easier to dispose of it in a dumpster rather than store it and the security, financial, and environmental ramifications are not well known.

Trashing ATMs

The ATM Industry Association wants ATM deployers to exercise more caution when discarding decommissioned ATMs.

“With over 2.2 million ATMs already installed worldwide, a figure forecast to increase to 3 million by 2015, this presents the ATM industry with a challenge on a huge scale. What happens to the thousands of machines which become obsolete each year?”

Not only do the machines contain the same sorts of materials that make disposing of computers hazardous for the environment, the machines also contain technology that unscrupulous people want to use to learn to defeat existing ATMs, the association added. This security risk presents what might be the most serious ATM security threat left unaddressed.

The association recommends that deployers like credit unions either completely disable the encryption PIN pad or destroy it outright. They also recommend that the credit unions not do this on their own but instead outsource the task to a certified firm. A certified electronic recycling firm will also make sure that environmental regulations are met, the association added.

Point of Sale Equipment: It’s the Law

Arkansas, California, Maine, Massachusetts, Minnesota and Washington have regulations on how individuals and retailers need to dispose of electronic Point of Sale (POS) equipment:

  • In California, the California Department of Toxic Substances control banned the disposal of thousands of electronic devices, including electronic cash registers and hand scanners
  • In Connecticut, regulation HB 7249 created a mandatory program to recycle discarded consumer electronics and stipulated that electronic Point of Sale equipment be recycled and cannot be disposed of in landfills by companies or in household trash by individuals
  • Illinois prohibits disposal of Point of Sale equipment in landfills and imposes civil fines of up to $10,000 for improper disposal

Each jurisdiction imposes its own requirements, but generally all require that electronics be recycled and if a business fails to provide a method of recycling, fines can be imposed.

Security Risks: It’s not just for Computers Anymore…

Identity theft continues to be one of the fastest growing crimes in the United States. It is common knowledge that simply throwing away sensitive personal information is as risky as leaving it on computers without the benefit of hard drive erasure or destruction. By not erasing or shredding the information, the risk of identity theft rises. What many businesses may not be aware of is that by using an IT asset disposal vendor that doesn’t guarantee shredding of EVERY hard drive, they could be putting themselves at risk.

Almost every copier, printer, and fax machine built after 2002 contains a hard drive filled with images of every document they’d ever copied, such as Social Security numbers, birth certificates, medical records, employee records, and financial documents. Up to 20,000 documents can be found on one unit. Often, owners don’t wipe these hard drives clean before selling the machines. Even fewer remove them. When CBS News recently ran a report “Copy Machines, a Security Risk?” CBS reporter Armen Keteyian demonstrated how easy it would be for this data to fall into the wrong hands.

After purchasing four copiers, the investigator was able to remove the hard drives and extract images of police records, building plans, pay stubs with names and social security numbers, $40,000 in copied checks, and 300 pages of individual medical records from an insurance company.

One copier, which originally came from the City of Buffalo, NY Sex Crimes Division, still had a document on the glass. Not only is this a gross breech of privacy, but it opens up the original copier owner to lawsuits and leaves them vulnerable to financial security threats.

In response to the CBS investigation, Congressman Edward Markey (D-MA) sent a letter to the head of the Federal Trade Commission (FTC) calling for a look into the retention of documents on the hard drives of digital copy machines. Markey, a senior member of the House Energy and Commerce Committee raised concerns about identity thieves gaining access to sensitive information that could be on those documents.

Until or unless copier, fax, and scanner manufacturers change their designs, the fact remains that disposal of this type of office equipment has to be given the same kind of attention to security that computers are.

Vlad Stelmak, COO at AnythingIT, an electronic recycler, says, “All drives that cannot be electronically scrubbed are physically destroyed through shredding, including office machines. If it stores data on it, it needs to be addressed. Otherwise, companies are left vulnerable.”

Dollars and Sense

In July of 2012, the Government Accountability Office released a report stating that 24 agencies identified nearly 2,900 data centers and estimated a savings of $2.4 billion from the closure of 1,186 of them.

“In terms of strategies, it all starts with knowing what you have, so complete inventories are essential for success,” David Powner, director of IT management issues at the GAO, said. “Having comprehensive cost estimates and detailed schedules are the key components of data center consolidation plans so that cost savings over [specified] periods of time are clearly known.”

The Office of Management and Budget expects agencies to use any savings achieved by increased efficiency to pay for the costs related to consolidation. Those savings will presumably come from reduced spending on real estate, network infrastructure and energy, but they may also come from the value recovered from the discarded equipment.

Data center consolidation has been occurring in the private sector as well. An ever increasing amount of mergers and acquisitions often results in redundant IT systems and data centers, and the use of technologies including virtualization, de-duplication, thin provisioning, the cloud, and other ways to cut back on the amount of hardware required.

Depending on the age and condition, government agencies and corporations can recoup value from data center equipment like servers, racks, and even network cables through resale and value recovery. Printers, scanners, and fax machines all retain some value too, especially newer models that can be sold wholesale.

“We have noticed a large uptick in demand for storage gear such as WAN and LAN equipment as well as a very robust demand for second hand networking equipment,” Stelmak said.

Processors, chips and connecting pins, found in all types of electronic waste, contain seams of silver, gold and palladium; these “deposits” are 40 to 50 times richer than dug-up ores, according to a study conducted by the United Nations University. Other less valuable and more troubling lodes for “urban miners” include cadmium, lead and mercury.

What does this mean for organizations that have IT equipment to get rid of? They need to find an IT asset disposal vendor that can return value for their networking, telephony, and office equipment, as well as for their computers. Simply recycling, without knowing if there is value left in the equipment through resale or metal recovery, has the potential for lost revenue.