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This can have different reasons.
Create portal customers on demand is disabled
In some cases the email address from MS Teams can’t be linked to the Customer Portal because the Teams settings configuration in Jira didn’t allow to create portal customers on demand. Go to Jira → Apps → MS3655 for Jira/Teams settings → Customer portal → open the relevant Portal and enable “Create portal customers on demand”
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Missing permission
We have observed that in some rare cases, our app does not get the correct set of permissions in Jira Cloud. If that happens, we are not able to fetch any user information, which is necessary for this to work. You can fix this by following the steps below.
Go to your Jira site and to “Global permissions” (<yoursite.atlassian.net>/secure/admin/GlobalPermissions!default.jspa)
Add the “Browse users and groups” to the “atlassian-addons-admin” group (on the very bottom of that page). Afterwards the login should work.
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User with email address does not exist
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