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, with a new corporate offence of failure to prevent fraud introduced in September 2025. A White Paper from the Global Education Recruitment Standards Authority (GERSA) warns that many UK universities and large colleges could fall under the scope of the act due to their reliance on overseas agents, yet awareness in the sector remains low.

Background and Context

The ECCTA, introduced in stages, expands corporate liability for fraud by holding organisations accountable if an “associated person” commits fraud intending to benefit the institution. Under the new provisions, larger higher education institutions with a turnover exceeding £36 million or total assets over £18 million can face criminal liability if third parties, such as education agents, engage in fraudulent activities. The legislation reflects growing concerns about corporate complicity in economic crime, particularly in sectors with complex global supply chains, like international student recruitment.

Key Figures and Entities

The Global Education Recruitment Standards Authority (GERSA), a newly launched organisation developing an accreditation system for cross-border student recruitment, has highlighted the risks in its White Paper. Birgit Hirst, GERSA’s chief commercial officer, noted that the agent recruitment space remains “largely unregulated,” offering “large financial rewards” and opportunities for fraud. Education agents, often paid commission to recruit international students, are classified as “associated persons” under the ECCTA, meaning universities could be held liable for their misconduct.

Legal and Financial Mechanisms

Fraudulent activities by unscrupulous agents could include falsifying student credentials, misrepresenting university offers or visa eligibility, and financial crimes such as tax evasion on commission payments. The rise of sub-agent networks—agents contracted by parent agents rather than universities—has further obscured accountability. Under the ECCTA, institutions must demonstrate they had “reasonable preventative procedures” in place, such as due-diligence checks and targeted training for agents, to avoid liability. Penalties for breaches include unlimited fines and regulatory scrutiny.

International Implications and Policy Response

Recent cases underscore the scale of the problem. In July, Indian authorities uncovered a ring of consultancy firms producing fake academic documents to secure study visas to the US and UK. The issue has broader implications for immigration policy, with governments increasingly clamping down on agent fraud linked to illegal immigration. GERSA’s warning suggests that universities must urgently reassess their recruitment practices to comply with the ECCTA and avoid reputational damage. However, Hirst notes that awareness of the new law remains low among higher education institutions, raising concerns about preparedness.

Sources

This report draws on the Economic Crime and Corporate Transparency Act 2023, a White Paper by the Global Education Recruitment Standards Authority (GERSA), and independent reporting on fraud cases linked to education agents.