The US Department of Veteran Affairs (VA), which has recently suffered the loss or theft of a number of computers, is to spend over $3m installing data encryption software on all desktops, laptops and handheld devices used by its employees.
Network-level data encryption is also under consideration, according to the department.
A PC containing veterans' personal data went missing earlier this month from the offices of Unisys, one of the VA's contractors. Unisys has put up a $50,000 reward for information leading to its return.
And in May, a laptop and external hard drive, again containing veterans' personal data, was stolen in a domestic burglary in the US. This computer has since been recovered and two 19-year olds and a minor have been arrested and charged with the theft.
"I have promised America's veterans that I intend to make VA information security a model, and this encryption programme is a major step in that direction," said VA secretary R James Nicholson in a statement.
The veterans' data loss has drawn criticism from Congress. Security experts recommend that data encryption is applied to portable devices because of the ease with which they can be stolen and the frequency with which they are targeted by professional thieves.
They also recommend that large databases of personal or financial information are not kept on mobile devices because of their vulnerability.
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