Email Already Exists error. Unable to add user

Email Already Exists error. Unable to add user

I'm trying to amend the email ID of an existing user, but the CRM says the email ID already exists.  I've got jsut 4 users in the Zoho mail.

When we later checked on Zoho - there was no account.  It took the user through the registration steps for a free user trial, and went and actually created an account!  This is impossible!

Please resolve.