I purchased the same computer a Dell Inspiron 13 7352 and I am receiving the message "We can't create the recovery drive.  A problem occurred while creating the recovery drive.".  It seems that maybe Dell needs to figure this out.  I called Dell and have talked to no less than 10 people and they keep saying that I have reached the wrong department.  The last person put me on hold over an hour ago.  I am only staying on the phone to see how long it actually takes.  This is the first Dell product that I have ever purchased and so far, I am not impressed.  I hope I haven't made a mistake by purchasing a Dell product.

Dell XPS 8700, one week old, as delivered. Just ran the Create USB Recovery utility and got the message "We can't create the recovery drive.  A problem occurred while creating the recovery drive." Problem occurred at about the 50% point.

I had earlier called Dell on a missing software issue and got the royal run-around, so I won't waste further time calling support on this.

This is the first Dell product that I have ever purchased and so far, I too am not impressed.

I bought an Inspiron 7548 about 2 weeks ago - and exact same issue - I have tried 3 times and every time receive:  "We can't create the recovery drive,  a problem occurred while creating."   Of course no error number or anything to help.  I called Dell support also, and couldn't believe it when the first thing technician actually asked me, "Why do you want to create a recovery drive?"

I can't find anything on Google to help - this is ridiculous.  I tried going back to Best Buy for help, but didn't buy the Geek Squad plan - so they would charge me.

You can't use the 128 GB USB flash drive, use a 16 GB one it'll suffice see here for details:

http://dellwindowsreinstallationguide.com/dell-backup-and-recovery-1-8-1-71/

Note you should also update to the latest UEFI BIOS A07:

http://dellwindowsreinstallationguide.com/updating-the-bios/

http://downloads.dell.com/FOLDER03153731M/1/7348_7352_7558_A07.exe

Then prepare for Windows 10:

http://dellwindowsreinstallationguide.com/upgrading-to-windows-10/

NATAKUC4: My issue is with the Dell Inspiron 5555. I get the same error "We can't create the recovery drive". I have a 32GB flash drive. I tried the 16GB and received the same message. The bios update for this PC does not say it is for Windows 10, only Windows 8.1 and lower (see link below). We just purchased this laptop on the 1st of September, 2015. Very frustrating. My wife wants to install her programs for her business but I wanted to create a recovery disc/drive first.  Flash Drive is my only option.

http://www.dell.com/support/home/us/en/19/Drivers/DriversDetails?driverId=J3Y5M

http://www.dell.com/support/home/us/en/19/product-support/servicetag/6FC1Y52/drivers

My XPS 8700 is one month old.  Like any sensible user, first thing I tried to do after setting up the computer was create a recovery drive.  I received the same message.  I contacted Dell and received the same question "why do I want to do that?"

After a problem with the On button (had to press it 3 or 4 times for the computer to boot), it turns out the hard disc had a problem.  That was replaced and now my original software (Dell, Cyberlink DVD, McAfee, Adobe) is all missing.  I cannot register my system with Dell to re-install the software.

Not very happy.  Dell has certainly gone downhill since my first Dell 12 years ago.

I too hit the same problem trying to create a recovery drive using a 32GB USB stick, following the instructions here:

http://www.dell.com/support/article/uk/en/ukbsdt1/SLN297924/EN

If I untick the "Back up system files to the recovery drive" checkbox, the process works but that's not what I want.

Same here - I just purchased my Dell Inspiron 13-7352 from Best Buy yesterday.  The only thing I have installed on the system is Microsoft Office.  I tried to create a recovery drive with a  freshly formatted 16 GB USB drive and got the same error - We can't create the recovery drive.  No other explanation.  The first time it appeared that it was working and stopped when the green bar was about halfway across.  Every time I've tried after that I get the message immediately.    I purchased the protection plan from Geek Squad so I guess I'll take it back to them, but it's ridiculous that a brand new PC is already having problems! 

Same here, it also says I need at least an 8gig USB stick, and it doesn't seem to recognize the two I have.  And when I use the 16gig I see it slowly fill it up and then fail.  I would *** it is the software and not the PC.  I have a feeling it is gathering up the install media incorrectly or something.

I have had problems with some Dell software on my Alienware 17 laptop when I switched to Win10 too.  I actually stopped using it as the diagnostic can have random failures.  So, I think Dell's software may not be as ready for Win10 as we would like...

Arrgh.  Along with boatloads of other Dell customers, I'm also experiencing this same issue with a brand new Dell Inspiron 15 5000.  I also receive the "We cannot create a recovery drive" error when selecting "Back up system files to the recovery drive" .  The recovery drive is created when this is not checked, but would really like my system files also on the drive.

The "Cryptographic Services failed while processing the OnIdentity() call in the System Writer Object" error also appears in the Event Viewer Application log.

This problem seems to be highly pervasive problem.  Is anyone from Dell actually working on it?  I'm hesitant to even contact them based on the "why would you want a recovery drive?" responses from them referenced in other posts.