Fraud Sciences is a privately held Israeli company that specializes in online risk tools. eBay said the acquisition fits in with its plan to improve trust and safety across its sites in 2008. "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," said Scott Thompson, President of PayPal.

Fraud Sciences told Businessweek in an October 2007 interview that it helps small Internet retailers to reduce the amount of orders thought to be fraudulent. "In the first nine months of operation we approved $45 million in legitimate revenues that in the past would have been thrown out," CEO Gadi Maier said.

Fraud Sciences uses a technique called "identity proofing" that confirms if a buyer is a real person and is who they say they are by examining digital footprints from around the Internet.

The acquisition is expected to close in the next 30 days.