LinuxQuestions.org - ProFTPD [530 Login incorrect]

I am having an odd error with ProFTPD and was hoping that I could get some more input on the issue.

I am using ProFTPD 1.3.1 Server running on Redhat 5 Enterprise, and have it setup and running without any errors. My anonymous login works just fine, people are able to login and download files. However when I try to log in as a user, I get a message that the password is incorrect. I have verified the password is correct by temporarily giving the user a proper login shell.

Here is all the information I can gather that is relevant:
passwd: betafiles:x:532:532:betafiles:/home/betafiles:/sbin/nologin

Code:

# This is the ProFTPD configuration file



ServerName                      "ProvideX FTP Server"

ServerType                      standalone

DefaultServer                  on



SystemLog                      /var/log/proftpd

TransferLog                    /var/log/xferlog

Port                            21

Umask                          022

MaxInstances                    30

User                            nobody

Group                          nobody

AllowOverwrite                  on

HiddenStores                    on

DefaultTransferMode            binary

UseReverseDNS                  off

IdentLookups                    off



<Limit SITE_CHMOD>

  DenyAll

</Limit>



<Directory /*>

  <Limit WRITE>

    DenyAll

  </Limit>

</Directory>



<Directory /home/*>

  Umask 077

  <Limit WRITE>

    AllowGroup staff

  </Limit>

</Directory>



<Directory /home/betafiles/*>

  Umask 077

  UserOwner betafiles



  <Limit LOGIN>

    AllowUser betafiles

    DenyAll

  </Limit>

  <Limit WRITE RMD DELE MKD>

    DenyAll

  </Limit>

</Directory>



<Directory /var/sagecan/*>

  Umask 007

  UserOwner webmaster

  GroupOwner staff

  <Limit WRITE>

    AllowUser webmaster

    AllowGroup staff

  </Limit>

</Directory>



<Directory /var/sagecan/pvxftp/*>

  Umask 002

  UserOwner    webmaster

  GroupOwner    staff

  <Limit WRITE>

    AllowUser  webmaster

    AllowGroup  staff

  </Limit>

</Directory>



<Anonymous /var/sagecan/pvxftp>

  User                          ftp

  Group                        ftp

  UserAlias                    anonymous ftp

  MaxClients                    50

  MaxStoreFileSize              50 Mb

  DisplayLogin                  /var/log/ftpsite.txt



  <Limit WRITE>

    DenyAll

  </Limit>



  <Directory uploads>

    Umask                      207

    <Limit STOR CWD>

      AllowAll

    </Limit>

    <Limit READ RMD DELE MKD>

      DenyAll

    </Limit>

  </Directory>

</Anonymous>

Nothing shows up in the messages or secure logs, and all that shows up in the proftpd log is:

Nov 11 15:53:49 <server> proftpd[27116] <server >(::ffff:64.88.170.33[::ffff:64.88.170.33]): USER betafiles (Login failed): Incorrect password.

I have made sure the users home directory is chmod to 755, and made sure the hosts had the proper server information.

I also tried adding the following options to the .conf file but they made no difference.
RequireValidShell off
AllowRetrieveRestart on
DefaultRoot ~

Any assistance would be greatly appreciated.