A rash of scams targeting foreign students is turning the business of handling tuition payments from a relatively low-risk proposition to one fraught with challenges.

In recent weeks, hundreds of foreign students attempting to pay tuition to U.S. universities for the upcoming school year were victimized by scammers who bilked them out of thousands of dollars by directing them to send their payments to bogus intermediaries for a discount, according to law enforcement agencies.

Between 80 and 90 students from China collectively lost about $1 million in tuition payments in one type of scam revealed this month at the University of Washington. A student in Seattle lost $25,000 in a single bogus tuition-payment scam, according authorities. Michigan State University reported another cluster of similar crimes this month targeting Asian students.

The situation is causing headaches not only for the students who lose money, but universities and the companies who promise swift and secure cross-border tuition payments, said Peter Butterfield, chief compliance officer at Flywire, Inc., a Boston-based company that processes payments from 220 countries for students studying primarily in the U.S., the U.K. and Australia.

“We’re getting called in to help, but the criminals are intercepting payments before they reach us," Butterfield said. "And by the time we find out about it, the money is gone.”

It’s not the first time foreign-student tuition scams have made the news, but this year’s uptick in such crimes is unprecedented, Butterfield said.

The scams are due in part to a surge in international students—most from Asia—who are  seeking a college education outside of their home countries. The number of students studying abroad increased to almost 5 million in 2014 from 2.1 million in 2001, and the Organization for Economic Cooperation and Development forecasts the number will reach 8 million by 2025.

During the 2015-2016 academic year, more than half a million international undergraduate students attended U.S. colleges and universities, according to data from the Department of Homeland Security. About 28% of the total were from China, while many students also came from South Korea, Saudi Arabia and India.

Flywire’s largest market for tuition payments originating outside the U.S. is China, followed by India and South Korea, Butterfield said. Flywire has contracts with specific universities to be the preferred payments processor for students coming from outside the U.S., providing a consistent process for handling funds.

Flywire offers a secure approach for students to send funds in their home currency, along with appropriate local forms, but it has little recourse when students get tricked into authorizing payments to crooks, Butterfield said.

The recent type of scams usually begin when a criminal obtains stolen credit card information, either from phishing or intercepting cardholders’ payment information through theft or data breaches, Butterfield explained.

Crooks or their agents pose as representatives of payments companies offering to handle students’ tuition payments for a 5% discount of the total. Students who agree to the deal provide their school login credentials, and the scammer makes the payment using a stolen credit card number.

When the student receives confirmation from the school that his or her tuition was paid, the scammer asks to be reimbursed by wire transfer or check. By the time the original tuition payment is revealed to be fraudulent and charged back, the crook already has the student's funds in hand.

Another common ruse involves scammers using fake identification to pose as students who make large tuition payments with stolen credit cards. Next they tell the school they’ve changed their minds, and request a refund via check. Immediately after cashing the refund check, they vanish. Many unsuspecting staffers at U.S. universities have fallen for that one, said Butterfield.

Yet another emerging problem surrounds shady operators who appoint themselves the unofficial tuition payment processor for a group of foreign students. The operator may gather legitimate tuition payments from a group of a dozen or so students and approach a university promising to release the funds for a marked-up fee, according to Butterfield.

The operators posing as freelance payment processors are a special thorn in Flywire’s side, said Butterfield, because they interfere with the company’s many established relationships with universities.

“We’ve done a lot of work to set up a secure, streamlined process for students to pay tuition with specific institutions, and opportunists come along with forged letters from universities purporting to be the legitimate payment processor, creating all kinds of chaos and confusion for us, the schools and the students,” Butterfield said.

The University of Washington and Michigan State have issued warnings to students and on their websites, and each explains how to spot these scams.

The Federal Bureau of Information reportedly is looking into the crimes at both schools and at others that are experiencing problems, authorities said.

Flywire said it’s stepping up investment in forensics and publicizing the scams to its partner schools, but it’s often too late to catch criminals once the scam comes to light.

“We’re working harder to keep schools abreast of developments and notify students to be wary of scams, and we’re spreading information about best practices,” he said.

Legitimate tuition promotions targeting foreign students are not uncommon, which is keeping the industry on its toes.

Geoswift, a Hong Kong-based payments processor specializing in overseas tuition payments, last month launched a promotion in conjunction with Western Union Business Solutions and China UnionPay International offering a free car pick-up for students using their services who arrive at schools this fall in the U.S., Canada, Australia or New Zealand.

UnionPay cardholders who use the PayTuitionNow from Geoswift can arrange to get car pickup service of up to $100 for tuition payments of at least $4,000.

Representatives at Geoswift and Western Union were not available to comment on the recent rash in tuition scams or its effect on their businesses.

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