You may not be prompted for the password when you open a Word document that is protected with a "modify" password

When you open a Microsoft Word document that is protected with a "modify" password, you may not be prompted for the password if the document exists in a Microsoft Exchange or Microsoft Outlook mail folder.

To protect a Word document against unauthorized modifications, follow these steps:

1. In Microsoft Office Word 2003 and in earlier versions of Word, click Save As on the File menu.
   
   In Microsoft Office Word 2007, click the Microsoft Office Button, and then click Save As.
2. On the Save As toolbar, click Tools.
3. Click either General Options or Security Options.
   
   Note The option that you click depends on your version of Word.
4. Type a password in the Password to modify text box.

To work around this problem, save or move the document to a directory on a disk drive. To do this, follow these steps:

1. In Microsoft Exchange or Microsoft Outlook, open the message that contains the Word document.
2. Click to select the document.
3. On the File menu, click Save Attachments.
4. Switch to the directory where you want to save the document.
5. Click Save.

When you open the document from this new location, you will be prompted for a password.

Microsoft has confirmed that this is a problem in the Microsoft products that are listed in the "Applies to" section.