Sounds like some needed settings in the Paypal manager have not been configured yet.
These steps should get you up and running:
1. Log into your PayPal Manager account at manager.paypal.com
2. Choose the 'Service Settings' option from the main navigation.
3. Choose the 'Set Up' link.
4. Scroll down the page and make sure the following setting are set as needed:
- Use Silent Post = "Yes"
- Enable Secure Token = "Yes"
5. Then, choose 'Save Changes'
6. Next, choose 'Customize' from the sub-navigation.
7. Make sure 'Layout C' is selected and click 'Save and Publish'.