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INTERNATIONAL OFFICE
A CAUTIONARY TALE
Virginia Pattingale
Flinders University
Introduction
The purpose of this paper is to address an aspect of risk in international education – the
relationship between agent and provider. In addition to the literature, the paper draws on
anecdotal evidence to illustrate an issue that is seldom discussed. The paper addresses
three themes: commercial integrity, ethical behavior and, risk management in
commercial relationships.
“Among the important roles of any public sector agency is the maintenance of high
standards of ethics, conduct and fiduciary responsibility. Having a clear overall policy will
demonstrate the agency’s resolve to combat fraud and corruption wherever it is found. It
will communicate the agency’s commitment to best practice and create a holistic
framework that minimises the risks of fraud and corruption and strengthens
organisational integrity.”
(Crime and Misconduct Commission 2005, p. 2)
Universities have established processes for risk analysis and identification of fraudulent
activities. They have developed systems around examinations and assessment to
ensure integrity of students’ work. There is awareness of the issues of degree mills,
accreditation mills, plagiarism, etc. NOOSR and UK NARIC provide publications and
training for staff whose role it is to assess and verify foreign documentation for
admission into universities. As universities have become more commercially oriented,
fraud has become more prevalent. Much has been written about academic and identity
fraud in the sector but as we enter into new forms of commercial activity we encounter
new forms of fraud.
The focus here is not on student or academic fraud, but on business to business fraud
relating to the relationship between the agent and the provider. The Education Services
for Overseas Students Act 2000 together with the National Code of Practice for
Registration Authorities and Providers of Education and Training to Overseas Students
(as amended 2007) (The National Code) are the key components in maintaining the
Are scams illegal? Some do involve unlawful conduct. They are generally created by
devious and resourceful people. Fraudsters are hard to prosecute. Fraud is difficult to
stamp out and if you have become a victim, recouping your money is improbable. The
scale of the problem is highlighted by websites where scams were exposed, such as
hoaxslayer and fraudwatch international.
Some of the most fantastic are the false nation’s scams. The Principality of New Utopia
founded by Oklahoman, Howard Turney (aka His Highness Prince Lazarus). This is, in
fact, a number of abandoned Gulf of Mexico oil platforms lashed together over a reef in
the Caribbean. It claims to have a University with a Medical School specialising in
research into longevity. Prince Lazarus has had a long connection with longevity drug
The lesson is, don’t believe everything you read and if it looks too good to be true it
probably is. One of the main tips from a lengthy list, available at
www.scamwatch.gov.au. is to use your common sense. But if it is simply a matter of
‘common sense’, why do scams succeed?
“Firstly, a scam looks like the real thing,” and “Secondly, scammers manipulate you by
‘pushing your buttons’ to produce the response they want. It’s nothing to do with you
personally; it’s to do with the way individuals in society are wired up emotionally and
socially.” (www.scamwatch.gov.au 2007)
It is said that our best response to scams is not to respond, don’t answer, delete it,
destroy it, hang up.
Universities work in a global market and the agent network provides a valuable service
in this context. Few universities have the human, capital and time resources to operate
effectively in multiple markets. Agents work alongside websites, brochures, academics
and international office staff in marketing institutions. Agents follow up, promote in
market, host visits, counsel potential students and represent universities in a legitimate
and legally binding relationship.
These partnerships are usually with privately owned business, ranging in size from
single individuals to large networked agencies acting in multiple countries for multiple
institutions. Some have networks and sub-agency arrangements stretching the capacity
of single institutions to monitor, review, reward or expose agents. We see the outcome
of students arriving in Australia, but how much do we know about the route they took to
get here? What do we know about their encounter with our partner and service provider?
Did the agent charge the student $2,000 to put in an application? Did they correctly
advise about the amount of English language study the student would need to meet the
entry requirements into the course? Did they steer the student away from a course at
one University because another University pays a higher commission?
In her article titled Foreign students don't come cheap, Milanda Rout claims that
“Universities are spending more than $64 million a year paying offshore agents
commission to recruit international students as the battle for the overseas market
intensifies.” (Rout 2007, p. 23)
The interconnection between skilled migration and international education should not be
underestimated. The commercial nature of both is a driver for cross-selling with many
education agents also acting as migration agents and vice versa. Universities and
“The ‘buying of academic success’ can in fact constitute a strong disincentive for
students to learn and cast doubt on the quality of diploma and degree holders; the
selling of ‘university seats’ can damage the reputation of academia as a whole;
plagiarism or the manipulations of research results can harm the development of the
academic corpus; and more globally speaking, academic fraud can endanger the
credibility and usefulness of the assessment systems in place and the value of academic
degrees, promoting distrust about the academic enterprise at large. Moreover, it can put
at risk the education export industry, which has become a major business in countries
such as Australia. Unfortunately, public authorities often feel powerless to address these
acute problems.” (Hallak & Poisson 2007, p. 234)
According to this document these are the following steps that should be taken in a risk
management approach:
- Identifying risk
- Analysing risk – using qualitative risk, management matrix – significance,
likelihood and frequency of risk
- Evaluating risk
- Treating the risk
- Monitoring the process via regular evaluation
- Communicating and consulting with stakeholders
- Recording the outcomes
- Implementing the risk management approach eg. a risk management
committee and plan
- Developing a fraud and corruption management policy.
Marcus Turner, of the NSW Department of Commerce, investigates the link between
reputation risk management and corporate governance. He asserts that it is possible to
turn this issue into an advantage by leveraging risk management for a reputational edge.
“In another case two American men conducted a fraudulent university, ‘Trinity Southern
University’. In a sting operation, officials from the Pennsylvania Attorney-General’s Office
paid US$398 for an MBA Degree which was awarded to a cat called ‘Colby’, including a
transcript of results which indicated that the cat had earned a 3.5 grade point average
(The Commercial Appeal 2004, ‘MBA for cat busts fake degree sales’, 11 December:
A5)” in (Smith 2005 p. 4)
Case Studies
Most agents are honest and have the interests of the students and partners in mind.
There are rogue agents who have behaved unscrupulously including those who charge
forward fees to students who are then unable to leave that agency, because their money
is locked in. Or those who tell students they will only need five weeks of English, when
they really need more than 30 weeks. International office colleagues have shared case
studies from their own experiences of fraud in the workplace revealing just a taste of the
range of activities confronting the industry. These gaps in integrity are not only found
among agents and students, but also among staff.
Web Scams. An agent in country Y involving University X where the agent set up a
website with the following URL. http://www.universityX.countryY.com
The website linked directly to the agent’s own website. Suddenly the other agents in
country Y started to complain because it looked like this was the ‘official website of
University X’ directing the enquiries straight to the agent. The other agents assumed that
the agent was getting preferential treatment but in fact he had simply purchased the URL
and used it for his own purpose. There is nothing illegal in his action. It does, however,
compromise University X who went to great lengths to ensure that the agent change the
website and stop using the University name in the URL. The agent complied and they
are still partners.
Misrepresentation Scam. The case of the University who found one of their agents
complaining to them about their apparent visit to his province in China. He complained
they were advertising interview sessions to students and had not consulted him about
the new agency they were working with. The advertisements claimed that
representatives from the University would be there to discuss courses and take
applications (and application fees, no doubt). Further investigation found that a local
company, not an agent of the University, was indeed advertising these sessions in local
newspapers, using the University logo downloaded from the internet and hiring Russians
to act as Australian counselling staff.
An agent sent a student to the University. The student enrolled in a BA, but was puzzled
that none of the topics included fashion design. The student explicitly wanted to study
fashion design and was told by the agent that a BA at this University was a great fashion
course. The University helped the student into another university and paid the airfare to
get him there.
The implication of these few examples is that fraud takes many forms and evolves over
time. Discovery by one institution could be shared to assist others in avoiding the same
pitfalls.
Much has been written about academic fraud and the forms it takes and solutions to it.
There are experts in the field of degree mills and identity theft. There are techniques for
identifying fraudulent documents but they are barely keeping up with technological
developments to create them. The resourcefulness and determination of those who want
to scam the system means that degree mills and accreditation mills are a growing
phenomenon.
Hallak and Poisson identify the following as examples of the types of fraud and
corruption opportunities within the higher education industry. Degree mills, exam
scandals, fake degrees, institutionalised cheating, plagiarism, expensive tutorials as
prerequisites for entry or success, leakage of examination papers, nepotism, bribery,
impersonation, smuggling foreign information into exams, cellular phone assistance,
collusion among candidates, intimidation by supervisors, purchase of papers over
internet, admissions fraud, scoring malpractice, bribery of academic authorities,
falsification of results, illegal changing of rankings on admissions lists, sale of seats, fake
credentials, manipulation of CVs and fabrication or falsification of research results and
data, to name just a few.
Garrett makes a point that as higher education institutions worldwide receive less
income from the state, competitive pressures may encourage admissions abuse and, by
extrapolation, other types of behaviour that may be considered to be unethical, to
secure funds.
So why do students want false documents that they know give them credentials they
have not earned? It is often an economic decision. Drivers include, competition for jobs
and professional appointments, the globalisation of the education and the labour market,
and the difficulty in verification of foreign credentials. Advances in new technologies,
including the internet enable fraud in new ways. It is hard to catch scammers, theirs is a
commercial imperative too.
“If these are counterfeited or altered, they can form part of a chain of documents used to
perpetrate a wide range of financial crimes, false student identity cards can be used (in
Academic fraud can include the use of false documents leading to even worse criminal
activity. Tracking and identifying academic fraud is in the public interest and identity
fraud is a particular concern. You can buy a fake degree from even the most reputable
institutions such as Harvard and Yale. These fake degrees are often sold as ‘joke
degrees’ but they can be used for purposes that escalate into higher order criminal
activity. Universityies use text-matching software eg. SafeAssignment as a detection and
educative tool and provide a clearly articulated policy on the internet. Universities
subscribe to NOOSR and UK NARIC for identifying documents and qualifications that
verify foreign credentials. These provide training courses for admissions staff on
detection of fraudulent documents. In Degrees of Deception, UK NARIC assert, that
fraudulent documents are not new but over the past 15 years it has become a worldwide
problem. The trade is now global and security measures are inadequate to curb it. The
increased commercial value of academic qualifications, eg.credentialism is a major
driver. Fake degrees are highly marketable.
The “virtuous triangle” construct (Hallak & Poisson) for improved transparency and
accountability are reflected by the axes described below:
- Creation and maintenance of regulatory systems
- Strengthening of management capacities
- Enhanced ownership of the management process.
“The triangle should include a learning environment that values integrity, well designed
governance with effective, transparent and accountable management, and a proper
system of social control of the way the sector operates and consumes resources.”
(Hallak & Poisson 2007, p. 25)
I have taken some of the ideas that Hallak and Poisson developed for good practice in
dealing with academic fraud and applied them to managing the agent relationship. Some
of these ideas incorporate what we, in universities, already do and some that we should
consider doing.
HEATHER EWART: For the past 18 months university vice-chancellors, TAFE colleges
and the peak body representing private operators have been lobbying the Federal
Government for rules and regulations to stamp out rogue education agents. At the
moment, the Government puts the onus on university and college operators to ensure
their agents are doing the right thing and has no intention of changing this approach.
JULIE BISHOP, EDUCATION MINISTER: Because the vast majority of them are located
overseas, Australian laws don't cover them, so what we do is regulate the providers. We
make the providers responsible for the acts of the agents.
Is training or self-regulation the solution? Parents and students trust the agents to deliver
a service as most of them have little experience of what to expect or do. The agent’s
reputation is just as important to their business as it is to ours. Those who do the wrong
The ethics module is salient to this discussion. Examples are provided of unethical
practice in dealings with students, institutions and with the education industry. An
agent/counsellor gains a statement of attainment by successfully completing an
assessment. They are then listed as “Qualified Educational Agents/Counsellors” on the
PIER website. They can, under certain circumstances, become de-listed. Paula
Dunstan, (PIER) Manager said that, “Institutions and students alike can view this list and
see if their agents are listed. This is as close as anyone has come to regulating the
agents”.
Another approach to the development of skilled and ethical agents is the Association of
Australian Education Representatives in India (AAERI). Formed in 1996, their goal is to
assure credibility and integrity in the industry in India. They have developed a “Code of
Ethical Practice”, “which stipulates that they must provide services to students in a
manner which reflects the established practices of Australian education and training
institutions and which safeguards the interests of prospective students on the other.”
Http://www.aaeri.org/home.htm
These trained and registered agents have agreed to be fair and honest in their dealing
with students, so we should have greater confidence in their level of service.
The biggest risk is to the reputation of the organisation. It is too late when an institution
is caught up in a situation of corruption, poor practice and mishandling. It is naïve to
assume that every one has the same attitude about integrity. As Locke suggests, best
practice companies understand that their reputation is an economic asset and needs to
be actively managed. There is a need to engage management as well as staff in the
process of protecting and enhancing that reputation.
Butler, asserts that concepts such as risk management need to engage employees as
essential component of reputation management and communication. A proactive
approach is to know your staff and partner’s core values as these are integral to your
institution’s reputation. Protocols and procedures around selection and appointment of
staff and agents to ensure our values are known and understood leads to better partners
and staff. Credibility, honesty and ethics are all interconnected and staff and agents can
contribute to the development of better systems and procedures and improve the
organisation’s resistance to fraud and corruption.
A national register of education agents would be a valuable and important construct for
this industry and a key element of the industry’s reputation risk management. Perhaps it
could be a self-selecting list generated by the education agents themselves. It should be
underpinned by ethics training and a declaration of their commitment to a code of ethical
conduct. A code of conduct for education agents and a public record of who have
committed to best ethical practice would go a long way toward enhancing the Australian
education industry’s reputation for integrity and quality of service. As we have seen, a
reputation for robust risk management can be effectively leveraged.
References
Ewart, H 2007, Tertiary industry demands Governmen action over student recruitment
trade, 5 April 2007 Australian Broadcasting Corporation Transcripts
(c) 2007 Australian Broadcasting Corporation
Fraud and Corruption Control Guidelines for Best Practice March 2005 (Crime and
Misconduct Commission, Brisbane, Queensland, Australia, 2005)
Garrett, R 2004, Global Education Index 2004, Part 2. Public companies- relationships
with non-profit higher education, The Observatory on Borderless Higher Education,
John Foster House, London. 2 (2004).
Hallak, J. & Poisson, M., Corrupt schools, corrupt universities: What can be done?
International Institute for Educational Planning 2007, Paris
United Nations Educational Scientific and Cultural Organisation (UNESCO)
Hawthorne, L., 2007, Outcomes- language, employment and further study, Discussion
Paper, for a National Symposium: English Language Competence of International
Students, August 2007, commissioned by Australian Education International in the
Department of Education, Science and Training (DEST)
Locke, L, 2007, Reputation and Issues Management , at the 2nd Annual Managing
Reputation Risk Conference, Melbourne, 22-23 March 2007
NSW Public Accounts Committee Inquiry into Academics’ Paid Outside Work in (2004)
Public Accounts Committee Inquiry into Academics’ Paid Outside Work Report No.
7/53 (150) – September 2004 New South Wales. Public Accounts Committee
[Sydney, N.S.W.] At head of title: Legislative Assembly. Chair: Matt Brown. ISBN
0734766319
Rout, M 2007, Foreign students don't come cheap, 29 August 2007, The Australian p 23.
Smith, R. G 2005, Identification processes in the higher education sector: risks and
countermeasures, Trends & Issues in Criminal justice No.305,December 2005
Australian Institute of Criminology, Canberra ACT
Schemo, D. J 2007, In Study Abroad, Gifts and Money for Universities, The New York
Times, August 13 2007 <http://www.nytimes.com/2007/08/13abroad.html>
Turner, M, 2007 Investigating the Critical Link between Reputation Risk Management
and Corporate Governance, Regulations and Compliance Standards at the 2nd
Annual Managing Reputation Risk Conference, Melbourne, 22-23 March 2007
<www.aaeri.org/home.htm>
<www.auqa.edu.au/gp/search/detail.php?gp_id=2819>
<www.scamwatch.gov.au>.