Immigration New Zealand has a secret blacklist with the names of 185 lawyers and immigration advisers it claims have questionable characters.
The blacklist was discovered by an immigration adviser when she found her files had warnings attached after obtaining them from the agency under the Official Information Act.
The New Zealand Association for Migration and Investment has lodged a complaint to Immigration about the practice.
"One of our highly respected members ... was devastated to find several character alerts or warnings had been marked on the file without her knowledge," said chairman Walter Stone.
"Immigration staff had put the alerts on her file each time one of her clients had submitted a false document ... the adviser had no involvement in providing the fraudulent certificates and was completely innocent."
Mr Stone said it went against basic principles of fairness and natural justice to place the alert in secret and not give the adviser the right of reply.
Immigration yesterday confirmed it had 185 advisers or lawyers with "active warning" on its application management system, despite there being no specific instructions for staff to place such alerts.
Area manager Michael Carley said that since the complaint staff had been told to stop creating any new warnings unless they had "objective and compelling" information.
"Immigration regrets this mistake and has apologised to the member in person," Mr Carley said.
"[Our] offices are in the process of reviewing the current warnings against advisers."
Mr Carley said he did not believe advisers and lawyers with active warnings had been unfairly disadvantaged because there was only a differential rate of three percentage points in approval rates between applications lodged by those with and without alerts.
"Immigration regards its relationship with licensed advisers and lawyers as extremely valuable and regrets this situation."
Immigration has agreed to work with the association and the Immigration Advisers Authority on new guidance for staff.
Mr Carley said advisers would now be told when a warning was raised against them, except in cases where the warning merely reflected a matter of fact.