I immediately contacted my department head and was ready to apply the school's academic dishonesty policy, which would lead to--at least--failure of the course. It didn't happen. The student came up with a lame excuse, I was chided for harassing the student, and it was all swept under the rug. I was tempted to resign in protest, but kept with it for two more years before quietly leaving academics.
I enjoy teaching, I think I'm good at it and my students tended to agree. Unfortunately, I can't make myself teach in the current educational system here in the US.