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Double-check that the user is assigned a policy such that he has been assigned to a vault.
A user needs to be assigned a policy in which he is assigned to a vault. If he was previously assigned a vaulted policy and had his ID file stored in the vault, but later his policy changed and he is not assigned to a vault, you will not be able to reset the password for the user, even if his ID file is in the vault.
Feedback response number NEKO87UMBL created by ~Fritz Refooman on 07/30/2010