I have a Cisco 877 router and I configured it to act as a VPN server, supporting both PPTP and L2TP VPNs. I can succesfully connect to it from Windows computers using the built-in VPN software.
There is only one problem: when using a PPTP VPN, encryption doesn't work. If I configure the client to require encryption (default setting), the connection fails with an error about the remote endpoint not supporting it. If I remove the encryption requirement, the connection succeeds. I've also tried tweaking the encryption settings (40/128 bits), but this didn't work either.
This is the relevant part of the router's configuration:
vpdn enable
vpdn-group VPN_Clients
accept-dialin
protocol any
virtual-template 1
ip local pool VPN_Pool 192.168.42.250 192.168.42.254
interface Virtual-Template1
ip unnumbered Vlan1
ip nat inside
peer default ip address pool VPN_Pool
ppp encrypt mppe auto required
ppp authentication ms-chap-v2 ms-chap chap
The router's IOS version is 15, and it fully supports encryption.
The strangest thing is, encryption is actually required in the router config; but not only the router doesn't seem to offer it... it also accepts unencrypted connections, which it shouldn't. It's like the ppp encrypt mppe auto required command is completely ignored.
How can I fix this?
