PF account freeze/ defreeze: Check out new EPFO SOPs to prevent frauds

New Delhi, Jul 10, 2024 

To safeguard your provident fund, the EPFO has introduced new guidelines for freezing and defreezing EPF accounts to improve security and reduce fraud 

Every month, a portion of your salary is set aside in a provident fund. The goal is to receive lump sum payments with interest at the time of retirement. But imagine losing that money to a fraudster who illegally withdraws from your account. It's a terrifying thought, isn't it?

In 2023, Priyanshu Kumar from Delhi targeted 11 Employees' Provident Fund (EPF) members through 39 fake claims, stealing Rs 1.83 crore. He was eventually arrested by the CBI.

To safeguard your provident fund, the Employees' Provident Fund Organisation (EPFO) has introduced new guidelines for freezing and defreezing EPF accounts to improve security and reduce fraud.

New guidelines:

Time-bound freezing: Accounts can be frozen for up to 30 days for verification, with an extension of 14 days for due diligence.

Multiple verification layers: A thorough verification process is required before freezing or defreezing accounts.

Criminal proceedings: In cases of fraud, criminal proceedings will be initiated, and funds will be returned with interest to the genuine member's account.

What is UAN?

The UAN (Universal Account Number) is a permanent 12-digit unique number assigned to an EPF member, remaining valid throughout the member's life.

How does the EPFO detect suspicious accounts?

The EPFO carries out multiple stages of verification for Member IDs (MIDs), UANs, and institutions to detect suspicious accounts or transactions. If any suspicious activity is detected, the account can be frozen for up to 30 days, extendable by 14 days for further verification.

What does freezing an EPF account mean?

Freezing an EPF account disables several operations, including:

1. Logging into the Unified Portal (Member/Employer)

2. Generating a new UAN or linking an MID to an existing UAN

3. Adding or changing member profiles and KYC/Employer DSC

4. Deposits through various channels

5. Settlements of claims, fund transfers, or withdrawals

6. Registering a new establishment based on the same PAN/GSTN

What is de-freezing?

De-freezing restores the frozen operations once the account is verified and found to be genuine within the given timeframe.

What are the categories for freezing?

EPFO said that "Categories" denote the classification of individual or group of MIDs/UANs/Establishments that require due verification.

Category A: MIDs/UANs/Establishments identified by the Head Office.

Category B: Accounts with attempted or actual fraudulent withdrawals.

Category C: Accounts with deposits without approval or adherence to instructions.

How are suspicious accounts identified and frozen?

When suspicious activity is detected, it is immediately reported to the Officer-in-Charge (OIC), who assesses and freezes the account. The information is then shared with the Fraud Risk Mitigation Committee (RFRMC) for confirmation.

The freezing is executed by the Nodal Officer of the IS Division upon receiving a request from the Authorised Officer. The Nodal Officer must execute the freeze on the same day of receiving the communication.

How is information shared with stakeholders?

When an account is frozen, the member and employer are notified via SMS and email. The EPFO ensures that this information is shared through the Unified Portal and other communication channels.

Freezing duration

The freeze typically lasts no longer than 30 days, except in confirmed fraud cases. If a grievance is filed, the duration varies based on the category of the account but generally does not exceed 30 days.

Can the freeze duration be extended?

If verification is not completed within the prescribed time, the freeze can be extended by up to 14 days, with further extensions requiring higher-level approvals.

How is de-freezing carried out?

De-freezing is initiated once the account is verified and found genuine. The process involves thorough checks and authorisation by the relevant authorities.

How can you protect your PF?

Beware of fake calls/messages: In a post on X, EPFO warned its members against sharing critical information such as UAN/password/PAN/Aadhaar with anyone. EPFO subscribers should not share these details with anyone over phone or on social media, even if the other party pretends to be a representative of EPFO.

"Never share UAN/password/PAN/Aadhaar/bank account details/OTP or any other personal or financial details with anyone," EPFO said.

The pension fund body further clarified that it never asks its subscribers to share their personal details like Aadhaar card number, PAN, UAN, bank account or OTP over phone or on social media. "EPFO or its staff never asks for these details over messages, calls, e-mail, WhatsApp, social media."

[The Business Standard]