Rude shock: Balance in 30% PF accounts negative as fraudsters withdraw funds

If you have changed jobs over the last few years and not transferred or withdrawn your provident fund, chances are you may find a negative balance now.

According to a report in the Economic Times today, fraudsters have siphoned off cash from about 25 million or 30 percent of PF accounts, which were dormant or inoperative for the last few years.

The fraud came to light when the Employees Provident Fund Organisation embarked on a clean-up of its accounts.

Funds have been transferred into bank accounts opened using forged documents. The ET report says the PF employees were pressured to clear the transactions fast and some of them even helped the scamsters by giving away details of the dormant accounts.

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[caption id=“attachment_871345” align=“alignleft” width=“380”]  The latest scam to hit the EPFO is sure to send shivers down the spine of a large number of middle class citizens, who are completely dependent on the provident fund for a peaceful retired life.
Picture: Kenteegardin/Flickr[/caption]

Of the total 81.5 million accounts, about 30 million with about Rs 16,000 crore are dormant. Earlier, the organisation had decided not to remit interest payment to accounts that have remained inoperative for three years or more.

The latest scam to hit the EPFO is sure to send shivers down the spine of a large number of middle class citizens, who are completely dependent on the provident fund for a peaceful retired life.

What is all the more shocking is that fraudsters have managed to dodge all checks and balances at two levels: at the EPFO and the banks, where they managed to open accounts by forging documents.

The report says the EPFO has launched an internal investigation. Interestingly, as part of a damage control the EPFO has asked officers to rectify the negative balances at the earliest and take extra care while transferring amounts on withdrawal claims.

Considering the big helping hand scamsters are getting from EPFO and banks’ staff, such steps are unlikely to be of any help in stopping the fraud.

The lesson for investors, meanwhile, is do not leave your account inoperative for long. Also do not be entirely dependent on EPFO for a peaceful retired life.

Read the entire ET report here.