Verisign is taking a new approach to the battle against so-called "pump and dump" schemes that artificially hype stocks.

A new module for the company's VIP Fraud Detection Service, set for release this Friday, features a "self-learning" behavioral engine designed to help brokerages spot and avoid pump and dump activity. The system works by weighing a number of factors, including stock risk, user behaviors, how trading compares to known fraudulent trades and the volume of trading for a particular stock.

The idea is to help Verisign's (NASDAQ: VRSN) online brokerage customers prevent scammers from manipulating thinly traded stocks using hype and rumor sent via "urgent"-looking spam e-mails and other means.

The new module comes at a time when online trading scams are growing in popularity, according to Forrester analyst Geoff Turner.

"Based on anecdotal accounts in our discussions with online brokerages, both the number of attacks and dollar volume of losses has grown over the past two years," Turner said. "The reason for that is that most of the controls are retrospective, they're designed to go in after the attack and find the perpetrators."

"Those old investigative methods don't work anymore; it's almost impossible to track down the bad guys or hold anyone accountable so it doesn't defer anything," he added.

In addition to monitoring behavior and stock activity, a second aspect of the Fraud Detection service is to check user accounts that might have been compromised and used to purchase stocks as part of the pump and dump scheme.

In this case, a user about to engage in unusual trading activity, as determined through their past history and other factors, would be asked for additional identity verification before a trade was allowed.

Verisign officials said that depending on how a brokerage decides to implement the service, a trader would receive a real-time alert before making a trade deemed suspicious, based on what the system has already collected about that stock and the user's past trades.

"Our software analyzes your trade in milliseconds so the brokerage can let the trader know immediately if there's a potential risk or scam going on," Perry Tancredi, senior product manager for Verisign's Fraud Detection Service, told InternetNews.com.

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