You will get this alert when more than one person is logged into a single Passpack account at one time. Passpack accounts are not intended to be used this way. If you need to share passwords with someone, you should open an account for each person, then share the passwords amongst yourselves.
If there are just two of you, you can do this each with his/her own free account.
For groups of 3 or more people, you'll require that one account upgrades to paid (usually a company account) then everyone else can keep their free accounts as usual. Also check out the Getting Started Guide PDF for a quick walk through of paid account capabilities and how to set them up.