Sunderland University has admitted it failed to discover that a new lecturer had previously been at the centre of a fraud scandal after falsely claiming to be the victim of satanic abuse.
Simone Doublett was convicted of fraud seven years ago and barred from the professional psychology register in New Zealand, her home country. The university uncovered the conviction by chance a few days ago.
Using the name Simone Bull, she was employed by Sunderland last year as a lecturer in criminology and social sciences. But it appears that no one at the university connected her with a well-reported court case in which she was convicted of defrauding an insurance corporation of NZ$10,000 (£2,900).
Ms Bull received the money from the Accident Rehabilitation and Compensation Insurance Corporation after claiming that her father, and others, had subjected her to ritual satanic abuse. Two years later, she admitted that the allegations were untrue. Despite claiming that the strain of her brother's death had triggered false memories, Ms Bull was found guilty of fraud by the Christchurch High Court.
The Psychologists' Board of New Zealand said it would not register her as a psychologist on completion of her diploma in clinical psychology.
A Sunderland spokesman declined to comment in detail on the case or whether the university routinely checked up on previous convictions relating to new employees.
Nor would he reveal whether her references had been taken up, although he did confirm that Ms Bull was registered for a PhD with the University of Canterbury at Christchurch, New Zealand.
A Sunderland statement said: "Some matters have just been brought to our attention relating to a recent appointee and we are currently considering them."
Liz Allen, national official of lecturers' union Natfhe, said it was the responsibility of employers to take the referencing system seriously.
"Given the vulnerability of many young students, we consider this to be paramount," she said.
Owain James, president of the National Union of Students, said guidelines needed to be in place to ensure that students, staff and institutions were protected from individuals with a questionable background.