US veterans win $20m payout over lost laptop

The stolen laptop contained personal details of up to 26.5 million veterans

The US Department of Veterans Affairs (VA) has agreed to pay $20m to veterans whose personal details were lost after the theft of one of its laptops.

The laptop and external drive were stolen in 2006 from the home of an employee, and contained the unencrypted names, birth dates and Social Security numbers of up to 26.5 million veterans and active-duty service members.

The employee notified his bosses immediately, but it was three weeks before the VA publicly admitted that the theft had taken place and warned veterans of the possible dangers. The theft prompted the VA to begin encrypting all software.

The laptop was later recovered and there was no evidence that the data had been accessed. However, under the terms of the settlement, veterans who can show that they suffered actual harm, like emotional distress or expenses incurred for credit monitoring, can claim between $75 and $1,500 (£52 and £1,053).

"The settlement with the Department's members and families over their alleged invasion of privacy should be a severe warning to any organisation that isn't using encryption on its laptops and other portable devices capable of data storage," said Michael Callahan, vice president at encryption specialist Credant.

"This isn't rocket science. It's similar to operating your business without liability insurance. The consequences of failing to encrypt are simple: your company could go under or become uninsurable as a result, which is pretty much the same thing."