The following is a great way to protect your PWL files and I thought it up:

WARNING: To do this you must mess with your System.ini file.

First, rename your pwl files with a new extension. It doesn't have to even be real.

Then, go to your System.ini file and open it up. Scroll down and you will see a part where they have your password files listed. Change there extensions to the new extension.

You can also change their location, and even what their filename.