International students are streaming into Australia, with numbers up 11 per cent on last year. While Chinese students make up the largest proportion, the number of Indian students in Australia reached a seven-year high in 2018, driven largely by favourable graduate employment outcomes.
Nepal, Malaysia and Vietnam are also key markets, and we are seeing increasing numbers of students from Brazil and Colombia.
While increased access to world-class education is overwhelmingly positive, it is not without challenges. Students from developing nations can be targets of fraud because their communication skills and financial literacy may differ from that of domestic students.
Unethical – often unregistered – education agents can give students misleading advice about courses and providers, and they often fail to pass payments for tuition fees on to universities. In some instances, migration agents sell international students fraudulent paperwork with false information about their education and employment experience.
The impact of such scams is significant for students and their families. In a recent incident, Tu Futuro agency allegedly swindled more than A$500,000 (£284,000) from hundreds of Latin American students seeking or receiving university education in Australia.
Other reports concern a “virtual kidnapping” scheme aimed at Chinese international students, in which families were contacted and students allegedly threatened unless large ransoms were paid. In May last year, the Australian Federal Police warned that this scam had conned A$2 million from the families of Chinese and Taiwanese university students.
Education agents around the world play an integral part in bringing overseas students to Australia. In 2017, legitimate education agents were responsible for nearly three-quarters of international enrolments in Australia.
However, many illegitimate agents operate in overseas jurisdictions and are not bound by Australian regulations. Policing their conduct is a challenge for universities.
Universities have taken steps to curb unethical conduct from illegitimate agents by conducting background checks to verify students’ identities, academic qualifications, English-language proficiency and financial capacity. But technology must play a key role in detecting and preventing fraud.
Illegitimate discount scams or “payment plans” are also offered to international students through popular payment apps. Fees are supposedly paid on their behalf after they release funds to a third party. But on receipt of the confirmation of enrolment, the payment is reversed by the third party, in effect forcing the student to pay double.
Fraud against international students is not confined to Australia. However, these instances – coupled with proposed legislative changes that could make it harder for students to transition to permanent residency – could, in time, make Australia a less attractive destination for international students.
Considering the growing capabilities of fraudsters, protecting the large number of international students in Australia is no easy task. Earlier this year, the federal parliament launched a national inquiry into Australia’s international education industry, with a particular focus on the regulation of student and migration agents who may be willing or unwilling conduits of fraud.
Some government and non-government bodies help to protect international students in Australia. The Tuition Protection Service, for example, protects the fees of international students whose education providers are unable to fully deliver their courses by helping students to find alternative institutions or apply for refunds.
The Association of Australian Representatives in India is an independent organisation that works to ensure the credibility of education agents who recruit Indian students for Australian education and training institutions. The AAERI provides a best-practice example of industry and government working together to combat unethical education agents.
Businesses servicing the higher education sector must also do their part. Finance departments in particular must have controls to identify fraudulent activity. They should include ongoing due diligence measures such as transaction monitoring and financial intelligence.
Considering the value of education exports, students studying abroad will remain attractive targets for scammers. This, coupled with the increasing sophistication of fraudsters, means that those working to protect the international student experience must continue enhancing their capabilities.
Education, awareness and intelligently deployed technology will continue to play a critical role in protecting international students from fraud. We must also look to examples of best practice in other countries to ensure that our universities remain profitable and competitive.
International student destinations that get student safety and security right will help to ensure the quality and integrity of their higher education and attract top talent from across the world.
Hayden Scown is Australia and New Zealand director of financial institutions and education with Western Union Business Solutions.
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Print headline: Protecting international students from fraud