There's a problem with the characters on the account. Most commonly this happens when you try to create a character. If you check the database you'll notice a lot of null data on the characters you are trying to log in to.
There's a few reasons why character creation may be bugged.
1) SP_CHAR_CREATE
Check this SP. You may have configured it correctly. Make sure you set up the new characters correctly (I set up mine differently so I won't go into detail, alternative methods are probably somewhere on this board, though)
To fix this you can try copying a clean SP_CHAR_CREATE or use one from the board.
2. Missing [DEV] Characters
The default characters that the SP_CHAR_CREATE clones to create new characters (basically a mold) are missing. Go into the character.dbo.user_character table and check for [DEV]Knight [DEV]Hunter etc.
If they are missing just add them or restore a clean database.
Good luck.