This happens when the web services option is selected on the customer center role that is being assigned to registering customer. This role prohibits a UI user from accessing the system with permissions and privileges that are created specifically for Web services development. This role adds to the security of your integration.
1. Navigate to Setup > User /Roles > Manage Roles
2. Edit the role being assigned to Leads/Customer registering from the Web store
3. Uncheck the Web Services Only Role checkbox
4. Click Save.
Note: When you test the website of the customer and register as a new user, the error should be
"The account you are trying to create already exists, but with a different password. Click here to log in using the original password , or register using a different email address"