COMPUTER CRIME IS INCREASING IN RELATION TO THE EXTENSIVE OF COMPUTERIZED RECORDKEEPING SYSTEMS BY BUSINESSES AND GOVERNMENT AGENCIES. THE BASIC PROBLEM WITH COMPUTER-STORED INFORMATION IS THAT KNOWLEDGABLE COMPUTER SPECIALISTS CAN SEARCH, FIND, EXTRACT, MODIFY, OR DESTROY DATA IN A MATTER OF SECONDS. PASSWORDS, THE EQUIVALENT TO LOCKS AND KEYS, CAN BE DECIPHERED WITH TIME, AND ANY REMOTE TERMINAL SYSTEM IN AN INVITATION TO BURGLARY. RECENTLY, SEVERAL ENCRYPTION-DECRYPTION SYSTEMS HAVE BEEN INTRODUCED, WHICH USE A SERIOUS OF CHARACTER SUBSTITUTIONS AND TRANSPOSITIONS THAT SCRAMBLE DATA. THE SYSTEMS ARE USER-INSTALLABLE AND COMPATIBLE WITH FREQUENTLY USED CARRIER INTERFACES. ONE CRYPTOGRAPHIC SUBSYSTEM NOT ONLY ENCRYPTS DATA STORED ON MAGNETIC TAPE AND DISK FILES BUT ALSO ENCRYPTS WHEN DATA ARE TRANSMITTED BETWEEN COMPUTERS AND TERMINALS. THE ELECTRONIC CODE BOOK, DEVELOPED BY AN ENGINEERING FIRM, IS A LOW-POWER, HAND-HELD ENCRYPTION DEVICE SPECIFICALLY FOR MANUALLY ENTERING ENCRYPTED INFORMATION INTO A COMPUTER. THE PRIMARY ADVANTAGE OF THIS MANUAL OPERATION IS THAT USERS CAN TRANSCRIBE ENCODED MESSAGES ONTO REGULAR PAPER AND TRANSMIT BY MAIL OR FACSIMILE. IN ADDITION, THE FBI HAS DESIGNED A SIMULATED BANKING ENVIRONMENT TO TRAIN SPECIAL AGENTS IN SYSTEMS SOFTWARE AND HARDWARE, THE PURPOSE BEING TO ELIMINATE COMPUTER FRAUD. AFTER THE SIMULATION OF A PARTICULAR FRAUD, DATA ARE FORWARDED TO AGENTS AT VARIOUS FIELD OFFICES SO THAT INVESTIGATIVE METHODS CAN BE SCRUTINIZED. WHETHER ENCRYPTION UNITS WILL ELIMINATE COMPUTER-RELATED CRIME IS CONTROVERISAL, SINCE THE MAJOR PROBLEM IS COMPUTERIZED FILE PROTECTION INVOLVES EMPLOYERS OR EMPLOYEES WHO FALSIFY INPUT DOCUMENTATION OR ALTER DATA. THE ADOPTION OF ENCRYPTION SYSTEMS BY BANKING FIRMS IS DISCUSSED, AND COSTS OF ENCRYPTION SYSTEMS ARE NOTED. (DEP)