This issue may occur if matching is not enabled in the database.  You can check this by going to Administration > Configuration > Enable/Disable matching.  In this box, ensure that both options are configured:
  • Check for duplicates
  • Auto-match duplicates in batch
When the first option is un-marked, it means that matching doesn't run at all.  

Once this change is made, edit the template for the batch with the error, and go to Configure options > Constituent matching.  Ensure that the box is marked to Use global settings, or that the box is marked to Check for records that match existing constituents.