Warnings from Immigration New Zealand have prompted some tertiary institutions to cut ties with a group of men believed to be controlling a large part of the lucrative Indian student market.
An Immigration New Zealand document from January this year said it was highly likely the men were operating a network of agents to recruit students from India.
It said sources in the Indian community had told Immigration one of the men had significant control over the industry, which last year contributed 28,000 students, 21 percent of all foreign student enrolments.
The report said tertiary institutions might be aware of what the men were doing, but were hesitant to act against them because that would affect enrolments from India.
The chairperson of Independent Tertiary Education New Zealand, which represented most private tertiary institutions, Christine Clark, said some institutions had already decided to stop working with the men.
"I have had confirmed that there have been quite a few involved in the past who have now, because of discussions with Immigration New Zealand, stopped using these people," she said.
"They were exploiting the sector absolutely dreadfully and I think that is the issue."
Ms Clark said she had been told the group was charging commissions as high as 60 percent of the fees paid by students.
RNZ spoke to two of the men, but is not identifying them for legal reasons.
They strongly denied the allegations and said Immigration appeared to have been supplied with false information by business rivals.
One of the men said his student recruitment agency had a 70 percent approval rate for study visa applications last year, which was much better than many other agents.
The Indian student market has exploded in the past five years, but has been dogged by problems including false information in study visa applications and institutions offering low-quality courses.
'We have to go on trust with a lot of agents'
Paul Anderson from Auckland Hotel and Chefs Training School told RNZ it was difficult for small New Zealand institutions to know who they could rely on to recruit students from India.
"We have to go on trust with a lot of agents and some of those great agents that we've had in the past have turned out to be not so great," he said.
"It's very hard for us to find a person in the industry or an agent within the industry that doesn't fall into some of those pitfalls that have been recognised by INZ."
Mr Anderson said one option for cleaning up the market would be to cap the maximum commission paid to recruitment agents.
"If we started to look at agents' commission rates being capped throughout New Zealand, agents would be looking for great courses rather than great commission rates," he said.
Meanwhile, Christine Clark from Independent Tertiary Education New Zealand said the organisation would consider introducing a cap on maximum commission payments to agents, but admitted that was likely to significantly reduce the flow of students to New Zealand.