Users not activated after Membership registration and paypal (sandbox) payment

Hello

I'm using Membership Premium 2.1.4, Buddypress 1.5.4 and WordPress 3.3.1

I have two Membership subscription levels: free trial and paid. Registration for the free subscription is working fine. When a user registers for the paid subscription, they go to paypal sandbox, pay, and receive an email with their login details. When they try to log in, they see the error message "Sorry, this account is not active.” The user is created, but set to inactive. Everything seems to be working fine up to that point.

For the free trial membership, the emails are sent to the user, and the account is automatically activated. Ideally this is how the paid subscription would work too.

I have my paid subscription plan active, public, and set to Mode: serial.
The PayPal gateway is PayPal Express - with Single Payments, set to Test Mode (sandbox)

In Wordpress > Settings > General, the "anyone can register" checkbox is not checked.

I feel like I'm missing a setting somewhere, or I have something misconfigured. Can you give me any ideas?

thanks,
Clare