Another customer approval problem

I have spent about two hours reading through the forums, I was so sure someone else must have had this problem. And they did - in 2006 - with version 1.3.0. At the time DrByte said the next upgrade would fix it. So why do I have the same problem witth 1.3.8?
This is the problem - I have the Customer Approval Status set to 2. So what I believe should happen is that customer creates account, customer receives email saying approval is pending, store owner gets copy of email, goes to Admin and changes customer status to approved, customer gets welcome email saying they can now shop. Happy customer returns to store and makes purchases.
BUT instead:
Customer creates account, gets welcome email saying they can shop (but they can't). Store owner gets copy of this email, goes to Admin and approves customer, no email is sent to customer. Poor confused customer gives up and goes to opposition store.

Is this a known issue or have I done something wrong?
Jen

I am still stuck on this problem and can't make the site live until it's sorted.
If I set the Customer Approval Status at 1, the customer is directed to a page explaining that they are pending approval. But if I set it at 2, they just get an email making out as if they have full privileges. Can someone in the know please confirm whether this is how it's meant to work? Please?
Jen

One of the things suggested to include in a post is a list of the mods currently installed on your site.
You could have an installed mod creating problems.

OK, thanks.
I have installed EasyPopulate CSV, Invoice 2.0 and Minimum Order 101a.
Jen

And I just thought, this could be a clue - I have all customers automatically being added to a discount group called Invoice upon account creation. Jen

Not familiar with them, but you might want to back out of the Invoice and Order ones one at a time to see if things change.