A Massachusetts legislator says consumers who use copiers, printers and multi-function products are unknowingly at risk for identify theft because personal data such as Social Security numbers, birth certificates, medical records, bank records and other personal information is captured by on-board hard drives.

“Nearly every digital copier manufactured since 2002 contains a hard drive that functions in a manner similar to a computer hard drive,” Rep. Edward J. Markey (MA-7th District) said in an April 29, 2010 letter to the United States Federal Trade Commission (FTC).

“I am concerned that these hard drives represent a treasure trove for thieves,” Markey said.

According to an April 19 CBS News investigative report, a sample of four used copier machines at a warehouse revealed tens of thousands of documents in less than twelve hours. One copier unit contained as many as 20,000 documents (see full video report below).

Markey urged the FTC to investigate the security issue and to give consumers new information on privacy risks associated with the use of such equipment.

“A picture may be worth a thousand words, but in this case, these images could cost consumers thousands of dollars if they were victims of identity theft,” Markey said in a website statement.

As a result of the privacy issues raised by Markey and the CBS News broadcast, the FTC has launched an outreach program to all copier manufacturers, resellers, and retail copy and office supply stores to alert them to the data risks.

“Businesses and government agencies should ensure that the information on the hard drives in digital copiers are wiped clean of personal information after the conclusion of use,” FTC Chairman Jon Leibowitz said in reply to Markey’s letter.

The FTC said it is their practice, as a government agency, to take ownership of the hard drives in the leased digital copiers, and to subsequently erase or destroy the drives once the lease has expired.

Copy machine maker Xerox says it has taken information security seriously for a number of years, and offers customers intelligent ways to protect their data on equipment with hard drives such as Image Overwrite, Encryption and Disk Removal.

At a 2008 Xerox Security Summit, company officials explained how they are helping customers better manage, control and secure their electronic and paper documents.

“We’re the custodians of customer data,” said  Xerox Corporation Security Program Manager Larry Kovnat, “data flows in and out of our devices, and flows through our software. So we take that whole issue of protecting that data very seriously.”

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