The US state of Michigan has a list of some 600 non-accredited higher education organisations that include fake and unauthorised or sub-standard institutions.

In Australia, the New South Wales Education Minister told state parliament that fake degrees purportedly from legitimate foreign universities were on sale from at least 40 sources within the country.

More than 15 per cent of South Africans in 2003 were believed to have obtained work on the basis of false education credentials while in Malaysia that year, as many as 10,000 people held bogus degrees from American diploma mills.

Britain's Universities and Colleges Admissions Service identified 1,000 fake qualifications among British and foreign applicants last year - twice the number of 2003.

The report says those involved in fraud include not only unscrupulous entrepreneurs and businesses but also students, academics and administrators.

There appears to be a gradient from unethical and small-scale deception through to potential or actual criminality.

'Learners can be victims of non-lawful practice but also willing participants, and there are many satisfied customers,' the report says.

'Deceptive entry criteria and plagiarised student work can mislead faculty and institutions, but some academics and administrators are directly involved in such activities.'

Fraud also has implications for stakeholders and agencies such as funding authorities, ministries of education, and immigration and security officials, the report states.

'In an increasingly globalised and knowledge-based economy, higher education qualifications have become a dominant currency for employment and mobility. Degree-holders command higher wages, and in many countries the wage gap between graduates and non-graduates is widening.

'Poverty, social disadvantage, under-supply, competition, rational self-interest and cultural norms may encourage [people to] resort to fraudulent practices to obtain desired higher education qualifications.'

Increasing numbers of students study abroad, plus under-supply and access problems in many parts of the world have fostered a 'borderless' education market, entailing a boom in trade in educational services across national boundaries.

'The parallel trends of commercialisation and internationalisation, along with inadequate regulation and consumer information, have encouraged growth in fraudulent activity by those who seek to profit from the naivety of others,' the report says.

The issue of fraud in higher education interfaces with three other key policy areas: immigration control, national and institutional reputations, and employment.

The Organisation for Economic Co-operation and Development and Unesco have proposed to create a global resource that would allow stakeholders to distinguish between legitimate and illegitimate higher education institutions.

The report concludes that as mass higher education develops and provision is increasingly commercial, international and IT-enabled, fraud will probably only increase.