Hotmail users getting a sign in error "401 - Unauthorized: Access is denied"

Hotmail users are getting an unusual error when trying to sign-in to the service. Even for the correct credentials, the webmail service is returning a “401 – Unauthorized: Access is denied due to invalid credentials” error when signing in.

The problem has been reported by many users over at Microsoft Community forums. Apparently, users are able to sign-in from their mobile devices but when using a PC/Laptop, the error shows up.

“401 – Unauthorized: Access is denied due to invalid credentials. You do not have permission to view this directory or page using the credentials that you supplied.”

According to DaveM121 over at community forums, Microsoft is aware of the issue and is working on getting a fix for everyone affected.