*** This bug is a duplicate of bug 1160372 ***
https://bugs.launchpad.net/bugs/1160372
I had the same problem for a while, turns out the file /etc/pam.d/vsftpd that
comes with ubuntu is buggy...
Comments the following line in /etc/pam.d/vsftpd :
auth required pam_shells.so
And restart vsftpd
This is the only solution that worked for me.
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https://bugs.launchpad.net/bugs/869684
Title:
530 login incorrect error after upgrade
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