Some More UK Data Loss

http://news.bbc.co.uk/1/hi/business/7334249.stm

This time HSBC have lost 370,000 sets of personal details from insurance customers. One thing that puzzles me in the reporting of this story is the statement that

although the data on the disc was protected by a password it had not been encrypted

How do you password protect something without encrypting it ?! Any software I'm aware of that does password protection will at very least use some form of rudimentary encryption (eg, old versions of winzip or office) or in most cases (pgp, modern office/winzip versions) perfectly acceptable levels of encryption for most scenarios...