Universities in England have been told to be more transparent about how they recruit students and not to make exaggerated marketing claims.
The Office for Students’ annual report warns against sales tactics such as financial inducements or “unconditional” exam-grade offers.
The higher education watchdog’s chief executive, Nicola Dandridge, has promised a review of admissions.
Universities Minister Chris Skidmore warned of “pockets of poor practice”.
The OFS warned increasing competition between universities was raising concerns about unfair pressure being put on students looking for places.
“Students can be offered enticements and inducements which are often not in their best interests, at a time when they may be especially vulnerable,” Ms Dandridge said
And they could face a “sales pitch with questionable incentives” – exaggerated claims about degree courses or the promise of bursaries for students looking for places in the clearing system after A-level results are released.
“We cannot have a situation where students’ expectations are raised unrealistically before they go to university, only to be dashed when they get there,” Ms Dandridge said.
The concern over admissions also includes unconditional or so-called “conditional unconditional” offers, when students are promised a place whatever their eventual A-level grades, as long as they accept an offer as their first choice.
This has raised worries about students not trying hard and ending up with poor A-level grades – or that they will take a course that does not suit them, just to guarantee a place.
Despite warnings, including from the OFS, figures this week showed unconditional offers were increasing – with a quarter of applicants receiving such an offer this year.
Ms Dandridge called for more openness in the admissions process – such as whether students were being given accurate information about what A-level grades were really needed to get on to a course.
The OFS could impose fines – and, in recent years, a number of universities have been criticised by the Advertising Standards Authority for marketing claims that could be misleading.
The annual report also reveals a number of universities do not have adequate plans in place for students in the event of a university, or a department or a course, having to shut down.
The watchdog’s review of the admissions system will begin next year – with the aim of making recommendations before the end of the year.
“To the extent that the existing system is not serving students’ needs in a fair, transparent and inclusive way, it must change and we will consult widely with students, schools, providers and others to understand their views and perspectives,” Ms Dandridge said.
The admissions review will also consider whether there is fair access to universities, including for disadvantaged youngsters.
Figures from the Department for Education published this week showed 26% of young people eligible for free school meals went into higher education, compared with 45% of those better-off students not eligible for free school meals.
White British boys eligible for free school meals had among the lowest entry rates, with 13% progressing to higher education.
The proportion for girls eligible for free school meals from black African families was 67%.
“There is work to do to dispel wider, persistent myths and misperceptions about access and participation,” Ms Dandridge said.
Universities Minister Chris Skidmore said the higher sector’s “world leading” reputation could be harmed by poor practice.
He said the OFS should hold universities to account and could use “financial penalties or deregistration in the most serious cases”.
Universities UK, which is launching its own review of admissions, said it was “already engaging with the Office for Students on the issues raised in this report”.
A spokesman for the universities’ group said this included “ensuring the fairness of the admissions process, being more transparent in how students’ university fees are spent and committing to ending grade inflation”.