An anonymous poster said:
Of course, even if the modems had NSA-proof encryption built in, the victim could always intercept the decrypted data on the DTE connector... cracking is and will remain a risky and stupid thing to do...
Most likely the DTE will be doing the encryption/decryption. Who would buy an expensive hardware encryption device when you can write terminal software to do it? Yeah, tapping 1200 and 2400 bps modems is prety easy to do. Actually you probably wouldn't even need to build filters or anything, just record the signal and connect it to a stock 2400 modem, then set the modem to originate or answer. The modem already has filters to decode the data, of course. You have to do it twice if you want to get both sides of the transmission tho.