Owner Ultimate responsibility
Many of todays device short of those with a HD. Cannot be wiped as stated if an hardward faiure exists. I had such and incidence once with a Palm Treo 680. I managed to delete some of the contents via a USB drive connection but not all.
As also stated if the product is refurbished the OS whatever it is should be clean factor image with all other partition purged before hand. With many of todays smartphones the contents can be hacked and access by so many means that I don't put any private or valuable content as I used to carry on my Palm Treo. I still use it though as a PDA only now since Android is buggy and there are so many apps that can or may be scanning content including Google monitoring what I do. I revert to my laptop for those communications and storage.
But owner need to make the best efforts to purge the data and/or reset the device before returning it or sending it in for repair.