In a statement PayPal says Fraud Sciences' risk technology will enhance its own proprietary fraud management systems and those operated by its parent company eBay.

"Integrating Fraud Sciences' risk tools with PayPal's sophisticated fraud management system should allow us to be even more effective in protecting eBay and PayPal's hundreds of millions of customers around the world," says Scott Thompson, president of PayPal.

The online auction house says the acquisition of Fraud Sciences fits its plans to "significantly improve trust and safety across its sites in 2008".

Key personnel from Fraud Sciences, including COO Yossi Barak and founders Shvat Shaked and Saar Wilf, will join PayPal's technology and fraud management teams.

The acquisition, which is subject to conditions, is expected to close within the next 30 days.

In a separate move, PayPal has signed up to the Iconix Truemark service, which will be available to all its account holders.

By placing an icon next to legitimate e-mail messages, the Iconix Truemark service helps consumers visually identify legitimate e-mail messages and avoid phishing attacks. The system uses industry-standard technologies such as DKIM, Domain Keys, SPF and SenderID to verify the authenticity of messages. The application then takes the process a step further by checking the identification of the e-mail sender against a list of registered senders with Iconix.

Once an e-mail has passed Authentication and Identification steps, a Truemark Check-lock icon is displayed in the consumer's inbox.

In addition to PayPal, the Iconix service identifies legitimate e-mail messages from nearly 500 other companies, including eBay.

"While there remains no silver bullet solution for protecting consumers against phishing, we continue to explore new technologies to help our consumers stay safer online," says Mike Vergara, director of account protections at PayPal. "Our customers have told us that tools like Iconix help them easily identify legitimate PayPal email, reducing their risk of falling for phishing attacks."

PayPal and eBay are still the brands most spoofed by phishing fraudsters, according to research released by Gartner in December.