Yes, it can, so if you've had an affair or done something crazy at work, beware! Messages are placed on the SIM card as data files. When you move or delete messages, the data actually remains. All you have to do is tell the phone to reference the files in different ways. For example, if you delete a message from the inbox, the phone will only know not to refer to it again when it displays the contents of that folder.
Even if you "permanently" delete messages, this simply stops the phone from listing them in the deleted items folder. You cannot recover such texts on the phone itself, but there are plenty of commercially available software packages that allow your PC to read data directly from a SIM card. Some of the more advanced tools figure out the card's file structure, which can bring the long-hidden deleted messages back to life.
Requested by: David Brown, Leeds
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