PayPal is strengthening its defenses with the aid of a new Security Key. The PayPal Security Key is a small, portable password-generating key fob that was developed in conjunction with VeriSign to help protect your PayPal and eBay accounts against phishing attacks.

The device works by assigning a unique six-digit security code each time you log in to your account. You will continue to use your regular user name and password to authenticate, but you also enter the security code that the device displays. The code is synchronized with a server at the time of authentication to verify that the code is the same. Once you are finished, the code expires.

The device will give PayPal an additional and much-needed layer of protection. While not foolproof, it should help thwart phishing scams which have been a serious problem for PayPal customers.

The …

Ebay and Paypal are gearing up to offer customers an increased security measure when logging into their Paypal account to further avoid data theft from phishing scams.

In the near future, password generating gadget can be used in conjunction with existing login credentials when signing into a Paypal account. The key fob generates a new 6-digit password about every 30 seconds. This password is synchronized with a server that verifies that the every-changing code is the same at the time of authentication. Verisign currently offers the same type of two-factor authentication security to customers through their Unified Authentication Token product.

Phishing scams involve a would-be thief making a site that appears exactly like a legitimate site such as Paypal, and then sending out spam emails drawing people to the fake look-a-like site, and asking consumers to “verify” their login …