Our coverage from eBay Live! in San Jose continues. Stay tuned for more stories, including a re-cap of Thursday's keynote from eBay CEO Meg Whitman.

Phishing, pharming, spoofing, hijacking. It's all part of the escalating cat and mouse game between the shady criminals lurking about online and eBay and PayPal customers. Phishing — fake emails designed to look like official correspondence from a company and get unsuspecting users to enter personal and financial data on a bogus Web site — has become a huge problem for eBay the past year.

Rob Chestnut, Sr. Vice President of Rules, Security & Safety for eBay sat down with ECommerce Guide during the annual eBay Live! Conference being held in San Jose, CA. to discuss the measures both eBay and PayPal are taking to combat the barrage of online fraud.

Chesnut said eBay has been working closely with ISP powerhouse Earthlink, which has also produced its own anti-phishing Web browser toolbar. He said there is no "competition" in this area and the companies exchange information regularly in order to ensure the best defense against phishing scams.

Each time a new phishing scam is launched, Chestnut said it takes eBay roughly 10-12 hours from the time they are first notified of the email to when they get an ISP to shut down the offending Web site.

Included in eBay arsenal of enforcement tools includes not only its direct connections in 33 markets, but also a former U.S. Customs agent, a former Scotland yard officer and a Battalion officer - all with the connections necessary to move quickly in almost any country around the globe.

"You just get better and better — even in Eastern Europe, where we don't have any sites," said Chestnut.

Working close with other large partners is also helping stem the tide of phishing emails.

"We're working with Microsoft on this problem, too. They're already blocking spoof emails on Hotmail and we're working with a number of other ISPs. I want to see a world where no one gets these emails anymore," said Chestnut. "I think that's a trend you're going to see over the next year."

eBay is also pushing its users to use 'My eBay and the 'My Messages pages for legitimate messages.

"We can more effectively contact them this way. It allows us to control fraud better. Basically, if it (an email received from eBay or PayPal is) is not in 'My Messages,' it's not real," said Chestnut. "In the future, this will enable us to contact our members more effectively."

Fewer Unpaid Items
According to Chestnut, the volume of non-paying buyers has decreased significantly in the last year thanks to a slew of measures taken by both eBay and PayPal.

"There are many people who have large inventory of items that lose value quickly, like concert tickets or electronics. For sellers in this area, it's important (to sell those items to legitimate buyers quickly). One of the things we've done is roll out a system to control who they sell to," he said.

Another service instituted this year is "Immediate Pay" for fixed priced and eBay Store items which requires - you guessed it - buyers to submit an immediate payment for an item or it is re-posted.

"Some sellers find this to be a great tool," said Chestnut.

Sellers can also refuse to accept bids from certain parties based on a variety of conditions in five categories.

"Buyers registered with PayPal are much less likely to not pay, so the risk is reduced significantly there. Also, buyers who don't pay for an item are marked. For example, if they have two non-paying bids in 30 days, they can be removed from our system," said Chestnut.

Another frequently used option by sellers is to refuse bids or sales to anyone in a foreign country, although this may be confusing to some as eBay this week has been stressing the importance of foreign markets.

Chestnut added that sellers can also protect themselves from problem bidders. For example, one person could theoretically tie up one person's auctions by being the highest bidder on all of his or her auctions and then not pay.

"They can limit the damage any one person can do. For example, if a seller says, 'I don't want any one person being the top bidder on more than one item,' that seller has the ability to do that. Of course, the ability is there to contact the seller to overcome those blocks. The adoption of this is growing quickly," he said.

Backing Up the Buyer
While eBay and PayPal take plenty of measures to protect the sellers on eBay, there's also considerable attention paid to supporting legitimate buyers as well.

"When we say using PayPal for transactions is much safer, we said, 'Why don't we back that up?' So now, if a seller has 50 or more positive feedbacks and a 98% positive feedback rating, we know they're safe. The buyer is now covered up to $1,000 for any auction. That's 75 percent of all listings on eBay. It's great for the marketplace and sellers because we're standing behind them. It makes it harder for the bad guys to compete," said Chestnut.

Devin Comiskey is the Managing Editor of ECommerce-Guide.com