Resolving “Trusted Platform Module Has Malfunctioned” and “Keyset Does Not Exist” Errors on Windows 11

by Ching

After changing the password for my local user account using the net user command, I encountered a problem with Windows Hello, and I was logged out of several services like Microsoft 365. In particular, Microsoft 365 showed an error with my Trusted Platform Module (TPM), stating that it had malfunctioned. Here’s how I resolved the issue.

The Problem

  • After changing my local account password using net user, I was prompted to use the new password for Windows Hello and PIN to work again.
  • I was logged out of all services like Google, Synology, and Microsoft 365, and had to log in again.
  • When trying to activate Microsoft 365, I received the error: “Your computer’s Trusted Platform Module has malfunctioned” with error code 80090016. The server message: “Keyset does not exist” appeared as well.

The Solution

After trying several solutions, I found the following steps that successfully resolved the issue:

Step 1: Delete the Content of the NGC Folder

The NGC folder stores information related to Windows Hello. Deleting its content allows you to recreate your PIN and resolve issues related to credential storage.

  1. Navigate to the NGC folder:
    • Open File Explorer and go to C:\Windows\ServiceProfiles\LocalService\AppData\Local\Microsoft\NGC.
  2. Take ownership of the NGC folder:
    • Right-click the NGC folder, select Properties, then go to the Security tab.
    • Click Advanced, then Change the owner to your user account. Grant yourself full control of the folder.
  3. Delete the content of the NGC folder.

Step 2: Disconnect from Your Work or School Account

  1. Open Settings (Windows + I) and go to Accounts > Access work or school.
  2. Click on your work or school account and select Disconnect.
  3. Reboot your system.

Step 3: Log In Using the New Password and Recreate PIN

  1. After rebooting, log in using your new password (the one you changed via net user).
  2. Go to Settings > Accounts > Sign-in options and recreate your PIN under Windows Hello.

Step 4: Activate Microsoft 365

  1. Open any Microsoft Office app (like Word or Excel).
  2. When prompted, sign in with your Microsoft 365 account.
  3. The activation should now succeed without any TPM or keyset issues.
  4. If prompted, re-connect your device to your work or school organization.

References

Final Thoughts

This was a frustrating issue to encounter, but following these steps fixed the problem. I hope this guide helps others who face the same issue with Windows Hello and Microsoft 365. Feel free to leave a comment if you have any questions or suggestions.

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