USB removable encryption not preventing users from opening unencrypted files

Hello,

We are using Safeguard version 8.0.2.16 on the server and version 6.10 to 8.0.5 on clients.

I had policies working to prompt for encryption when a usb stick was inserted into the pc.  If the user opted not to encrypt, the user was locked out of the stick.  If they did choose to encrypt, they would be prompted to choose a media phrase.  This was set in our test.

So I go to roll it out to our IT group, and it doesn't work properly.  If the user chooses no to encrypt, they have complete access to read and write unencrypted.  If they choose yes, the files are automatically encrypted.  When they copy a file to the stick, the SG portable app is copied, but they aren't prompted to choose their media passphrase.

I have checked the RSOP and it appears to be correct to my settings.  Has something changed due to Microsoft patches?

 EDIT:  I figured out that the media passphrase is for the machine, not individual drives.  Once it is set, it became the default password for all removable media inserted.  Therefore, you are not prompted to create a passphrase any more.

What is still happening is that once you said no to the initial encryption prompt, the drive is still accessible even though the policy says user is not allowed to access unencrypted files.

Thanks,

Arman