Universities using agents ‘risk falling foul’ of new fraud laws

British universities working with education agents are “particularly vulnerable” to breaching a new economic crime law, it has been warned. 

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) aims to make corporations more proactive in preventing fraud. It has been introduced in stages, with a new corporate offence of failure to prevent fraud introduced in September 2025. 

In a White Paper, the Global Education Recruitment Standards Authority (GERSA) has warned that many UK universities and large colleges will fall under the scope of the act and could be at risk of breaching it, in part due to their relations with education agents, but awareness in the sector remains low.

Under the new provisions, organisations – including larger higher education institutions with a turnover of over £36 million or total assets over £18 million – can be held criminally liable if an “associated person” commits a fraud offence intending to benefit the organisation. 

Associated persons include third parties performing services on behalf of the institution, such as agents paid commission to recruit international students to the university. 

The White Paper says universities are “particularly vulnerable” to this offence due to “complex global student recruitment networks” and “heavy reliance on overseas agents creating multiple touchpoints for potential fraud”.

It continues: “High volumes of significant value financial transactions (e.g. tuition payments, scholarships), [make] them attractive targets for fraud”, while “reliance on third-parties for outsourced services, including payment processing and marketing” increase “the exposure to fraud and misconduct”. 

Fraudulent activities by unscrupulous education agents could include falsifying student credentials, misrepresenting offers or visa eligibility, and financial crime risks such as tax evasion on commission payment. 

There have been a number of significant cases of fraud linked to education agents working with UK universities in recent years. In July, for example, Indian authorities uncovered a ring of consultancy firms producing fake academic documents being used to secure study visas to the US and UK. 

The rise of sub-agent networks – agents contracted by other “parent” agents as opposed to universities – has been thought to contribute to this trend, with some institutions no longer directly connected to all of their recruitment partners. 

“There is both opportunity and incentive to commit fraud in the agent recruitment space at present, as it remains largely unregulated and offers large financial rewards,” said Birgit Hirst, chief commercial officer at GERSA, a newly launched organisation developing an accreditation system for cross-border student recruitment.  

“Therefore, various types of fraud are not uncommon and the impact is hugely detrimental to students, the education providers and the sector as a whole. The continued pressure on immigration numbers means the government also has an interest in clamping down on agent fraud contributing to illegal immigration.”

The White Paper continues: “If such fraud benefits the institution, either directly or indirectly, the institution may be liable unless it can demonstrate that ‘reasonable preventative procedures’ were in place at the time.” 

Penalties include unlimited fines and potential regulatory scrutiny. 

GERSA suggests reasonable prevention procedures could include due-diligence on agents, including background checks, as well as targeted training for agents and sub-agents on fraud risk. 

“ECCTA is relatively new legislation and many higher education institutions may not yet have fully digested or understood the potential impact on the sector,” said Hirst.

“The initial soundings we have taken with sector organisations and a sample of institutions would suggest that awareness is still low among universiti