Mobile phone company EE believes one in 10 of its mobile phone contracts in some university towns are at risk of being used by fraudsters.
Thousands of students are being conned into taking out new contracts and passing the handsets to someone else, Radio 4's You and Yours has been told.
The students are promised an income in return, but they end up liable for bills and chased for debts.
Police are investigating and say thousands of cases could be unreported.
The students have contracts taken out in their names and pass on the phones to a private company for around £50 each, with the promise of more money in the future.
You & Yours has spoken to students who have been conned. One said: "I started getting bills from phone companies and letters from debt collectors. I got really scared and pretended it wasn't happening. I'm in debt for roughly £6,000."
EE's Chris Sims said: "We're seeing a high level of sophistication from the conmen. They're using social media to contact more people, and that's why this type of fraud is on the increase."
The National Mobile Phone Crime Unit is advising students to not give away personal details, and to look at their credit ratings to see if any changes have occurred.
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