What should I do in this situation? (details included).

Tell your old employer. With lawyers, if need be.

I would contact the employer and tell them the problem with what was done. Ask them to get the laptop back from the contractor and wipe the hard drive like they said they were going to.

This is appalling. Injury on top of insult. I think the company should be liable for any losses you suffer and/or any expenses you incur. Do as @marinelife and @Nullo suggest. Speak first with the company (also put the details in writing) and if you get no satisfaction, tell them you’re consulting an attorney.

(1) See what the guidelines for use of the company laptop are.

(2) Retain any communications regarding the computer, termination, etc. between you, the employer, and any of the employees.

(3) Figure out who the contractor is. Find out any information possible about the relationship between your company and the contractor.

(4) Determine if there is any actual damage to you from the access to the information, and what information could have been accessed.

(5) See if you can talk to a lawyer.

(6) (based on recommendations) What @Nullo said.

Unfortunately, I wouldn’t inform the company before I was sure I had all the information I could about the situation. If they’re that sloppy, then you don’t want them to have a chance to clean up. If they’re that insidious, then you don’t want them to have a chance to clean up.

Just to add on @iamthemob make sure you do everything in writing.

EVERYTHING.

ASK the company to do the things they promised. You really should not have been using their computer for your personal business. (I know: everyone does, and so do I. I just know that our IT group really does follow the proper procedures to re-initialize recycled computers, and I know the guys who do it, so I’m less worried than maybe I should be.)

You really don’t have a legal leg to stand on here, so I would not attempt to make this a legal issue at all, unless harm is actually done. What your aim should be here is to enlist their assistance in seeing that harm does not befall you. You want cooperation, not confrontation. (You’d lose the confrontation.)

I would call your old boss and tell him what is happening. But why oh why didn’t you do it yourself before you turned it in, that was a major mistake on your part.

Ouch – go back right now and insist that they make good on their promise. Take the phone number of your lawyer with you, and be prepared to call.

If the laptop belongs to your company, then so does the information it contains. before turning in the laptop,, you should have erased any and all personal information, pertaining to you.

Everyone here is clear, though, that the employee that received the computer had actual knowledge that there may be private information on the drive at the time.

That’s a legal leg.

@rooeytoo, @john65pennington
I didn’t know that I was going to be fired. I didn’t “turn it in.” I was called into a meeting, they told me it was my last day, they went and got my laptop, and they gave me a box to put my stuff in, and, when I was finished packing up, they walked me out the door.

Telling me what I should have done doesn’t help me in my current situation. At all.

@phoenyx – sorry didn’t mean to be unhelpful, I didn’t understand your exact situation based on your original question. Under the circumstances I would continue to change all passwords as you said and I would call the old boss and firmly but politely tell her/him what is happening. I can’t imagine that anyone wouldn’t help you out. I don’t know about the legality of the situation because it was their laptop and they were simply confiscating their property.