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If you clear the Kobo app data from the applications list, you will need to run the Setup program again to sign back into your account. The device doesn't work in anonymous mode. Launching the Kobo app after an app clear should automatically take you to the Set up program. But if it doesn't (ie you're getting that error), then go to Settings -> Kobo eReader Settings > Set up Kobo Reader
That should get you going again.
James
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