Instead, the IT industry will have to establish a "clearinghouse" for approving the signatures that can serve as a go-between for businesses and ISPs, he said.

Barrett said Paypal is also hopeful that tools, including browser-based visual cues that warn people about suspected phishing sites and so-called extended validation Web site digital certificates, will help end-users further discriminate between legitimate sites and phishing lures.

The applications the CISO cited include browser toolbar applications that interact with newer iterations of the programs -- such as Microsoft's IE7 and Mozilla's Firefox 2.0 -- to identify suspected scam sites, along with plans to add more native anti-phishing tools into future versions of popular e-mail clients.

In addition, Paypal began selling one-time password-generation tokens to its customers for US$5 apiece earlier this year to offer interested users another added line of defense for protecting their site authentication credentials.

Combining those tools with traditional anti-fraud modeling and phishing site blacklists shows a great deal of promise in further weeding out criminal transactions on Paypal, Barrett said.

"We think that some form of hybrid authentication is the best idea, and we're using all of the elements that we already know about user behavior to tell if it is them. If someone is trying to do high-risk transactions or anything that looks suspicious, we can employ additional controls," he said. "Phishers are doing it because launching the attacks is easy and suckers still fall for it; there's very little time and money needed to build a phishing attack. The idea is that if we can slow it down, they may move and do something else."

Outside of defending their own operations, Barrett said companies should also try to open lines of communication with government and law enforcement agencies that may be able to help them chase down those responsible for the attacks.

While data leakage events have become a public relations and brand management nightmare for companies affected by the incidents, the Paypal CISO said businesses that become targets of phishing attacks can mitigate the impact on their corporate image through hard work and preparation.

"You can't be complacent about it. If it hasn't happened to you yet, count your lucky stars and start building a program because sooner or later someone will find you," said Barrett. "You have to be upfront with customers and explain what the bad guys are doing and how they can protect themselves, and try your hardest to lower the impact."