Add File to list: The specified file could not be copied, because the destination directory is not properly configured.

The module works perfectly, thank you!

One thing I noticed though, is that the following error message is shown whenever the rule is triggered:

The specified file public://DIRECTORY/FILENAME.png could not be copied, because the destination directory is not properly configured. This may be caused by a problem with file or directory permissions. More information is available in the system log.

Could this have something to do with the fact that I have the File Entity module enabled?