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Charity has a server in their office onto which they backup a database with sensitive information. They want to get rid of this server.

Is there a cost effective solution that would allow them to comply with UK Data Protection Act?

Currently I think about encrypted version stored at Dropbox.

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Dropbox is compliant with the Data Protection Act, the main worry is point 8 of the Act:

Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data.

If a company is outside the EU and in the USA then there is a 'Safe Harbor' list maintained of companies that fulfil the the level of protection clause.

Here's a blog post from Dropbox saying they are now Safe Harbor certified and a link to the Safe Harbor site so you can check for yourself, might also be worth checking for other companies you're considering.

Dropbox Blog:

Safe Harbor List:

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