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TrueCrypt a Possible Answer
 
The Problem:
The mass media has recently exposed numerous major security breaches. A laptop from the Veterans Administration was lost in June. It exposed 291 IRS employees to identity theft. In May, the Veteran's Administration lost a laptop during a home burglary. It had the social security numbers of over 26 million veterans.
 
The Federal Trade Commission is in charge of Identity theft issues. In June an employee left two laptops with 110 people's names, addresses, social security numbers and in some cases financial information, in his car. They were stolen and the thieves might have gained access to all that information. Recently five separate government agencies have reported losing private citizens' personal data enabling identity theft.
 
Joel Winston is the associate director of the FTC's Division of Privacy and Identity Theft Protection. He said, with prize winning understatement,  "We will be reassessing what procedures we have to make sure reasonable measures are taken to protect data."
 
These disclosures are causing many of us to reassess our own procedures for protecting our clients' data. We have to backup our data, but are our backups sufficiently protected? What will be accessible if someone steals our laptop or even breaks into the office and steals our server or desktop computer? How can we insure the confidentiality of our employee and client information? What about our flash drives?
 
The Good
 
I have found and tested a method to solve these issues. Specifically, this solution will:
 
The Cost
 
How It Works
You determine how much confidential space you need, and create a file that size. You create a password (or use a file as a password). Now you have an area on your hard drive which will be used for your secret data. That area is really just another file with any name you like. Remember, it isn't any safer than your password is. A bad password will make for insecure data. Check out last month's article on passwords. Because passwords must be long, I recommend pass phrases instead of passwords.
 
To access your information you establish an access point or link to that file. They call this "Mounting" the "drive". After that access point is established, the file will appear as if it were another drive. It is completely open and accessible. It will appear as a normal file on a normal drive. When you want return the data to secure mode, then you dismount the drive. Nothing is ever written into that file which is not encrypted and fully safe. You will probably need to dismount the drive to back it up. As long as it is mounted, the information is open and accessible. When dismounted it is secure.
 
For example, you could create a file called Uma.dat and create a link to it as the U drive. Then move your client or employee information  onto that U drive. You could share the U drive with others in your office. You go into the office, start your computer and you appear to have no client information. Those programs try to access a non-existent U drive. You then mount uma.dat as the U drive using your long and complicated password. Now, your client and accounting programs work normally. You can even share this data with other computers on your network.
 
At the end of the day, or before a nightly backup runs, you dismount the virtual U drive and your data is safe. If you turn off your computer, then the drive is automatically dismounted. This dismounting process can be scheduled and automated.
 
The Specifics
 
The best product I have found so far is Truecrypt . This is a mature product currently in version 4.2. It's been around a long time. Many people from all over the world are working on it. PC Magazine in August called it one of the 101 most important websites. Over a million copies have been downloaded A few thousand new downloads occur each day. So far 163,000+ copies of this version have been downloaded.  All possible issues have seemingly been thought through. It is amazing. It is also Open Source  which eliminates bad implementations, silly errors, backdoors, or a company that could be corrupted by money or government. It is proven technology very well implemented.
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Copyright (c) by Steven Shank 2010
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I attempt to provide reliable information, but make no warranty as to the accuracy or safety of these articles. I disclaim all legal responsibility for what following these instructions may do. Follow my advice at your own risk