I've never seen this before. I setup my ftp daemon, I've tried a few at this point, all of them result in the same. When I try to log in as a local user, using the correct password, it gives me a 530 password is incorrect. This happens everytime, with every user.

Any ideas?

Ok, seconds later I've figured it out.

When adding users with "useradd" I was not specifying login shell, so in /etc/passwd the shell area was blank. Because of this, the ftp daemon was not letting me log in.

I am going to fire my bbgun now.

Good going for working it out.

If that hadn't worked, I would have suggested looking in /etc/ftpusers to see if it was listed there. Counterintuitively, anyone listed in /etc/ftpusers will not be able to use FTP or SSH, etc. I'm not quite sure why the file's called that myself, but, yeah.

By the way, the other thing to watch out for is that if you specify a login shell that's not listed in /etc/shells, most FTP servers will do the same as you described and not let the user log in - so just putting /bin/false as a login shell won't help unless it's also listed in /etc/shells.