You can download FTP sync utility from the following link.

http://www.hostingcontrol...rms/HCUtil_IISSync.zip 

Please follow the steps given below to configure FTP sync utility with HC panel.

1. Place this exe inside "bin" folder under HC installation path. 
2. Add a scheduler in the Windows using Windows scheduler located at "Start Menu -> All Programs -> Accessories -> System Tools -> Scheduled Tasks"
3. Give path of this HCUtil_IISSync.exe placed in bin folder and repeat the task Daily at the lowest server load time.
4. Perform the above mentioned steps on all the machines added in HC cluster having "Web" role given to them.

To manually run the utility instead of scheduler, just double click on it and it will sync the missing FTP users from the database for that webserver machine.

This issue will be fixed permanently in coming build.

Thanks a lot. It is better late than never.

You are welcome.

These reported bugs has been resolved in build6. See detail in http://forum.hostingcontroller.com/tm.aspx?m=22165

FTP virtual directory (username) problem still exists in Build 6!  Tested on Windows 2008 R2 with IIS 7.5 / FTP 7.5.  Configured web server to use FTP 7 and Default FTP Site yet no virtual is created under the Default FTP Site!

Does the problem exist for IIS 6 too?

Sorry we don't setup new accounts on a 7 year old operating system anymore so I can't tell you.  All new accounts are on Windows 2008 R2 IIS 7.5

FTP 7/7.5 needs some additional instructions which they haven't shared with us except by ticket.
 
Please follow following step in order to resolve your issue.
Go to IIS , start---run-inetmgr Right click on sites > Add new Ftp site > Give new ftp site name " Default ftp site " or any other you like Home directory path = c:\inetpub\ftproot (if this path not existed then create it and gives Everyone user read permission on it ) , press next IP Address = All unassigned, port = 21 and press next At last page keep uncheck anonymous and enable basic authentication, don't make any changes on this page. Press finish Select newly created default ftp site.and come toward right side windows option, Chose " FTP User Isolation ". Double click on it and select option  "User name Directory (Disable global virtual directories ) " Now right click on default ftp site > chose option Add virtual Directory Give Alias = LocalUser, Home directory path = c:\inetpub\ftproot  (same as you mentioned in default ftp site ) Now when you create a user they will be under that LocalUser virtual, don't ask me why, they said it was necessary for them to make it work.  It does work.  When you create a user its now under Default FTP Site / LocalUser / theirusername, and when they ftp in they are dropped into the isolated ftp account which is a nice touch from the way IIS6 worked before.
 

nextmill

FTP 7/7.5 needs some additional instructions which they haven't shared with us except by ticket.
 
Please follow following step in order to resolve your issue.
Go to IIS , start---run-inetmgr Right click on sites > Add new Ftp site > Give new ftp site name " Default ftp site " or any other you like Home directory path = c:\inetpub\ftproot (if this path not existed then create it and gives Everyone user read permission on it ) , press next IP Address = All unassigned, port = 21 and press next At last page keep uncheck anonymous and enable basic authentication, don't make any changes on this page. Press finish Select newly created default ftp site.and come toward right side windows option, Chose " FTP User Isolation ". Double click on it and select option  "User name Directory (Disable global virtual directories ) " Now right click on default ftp site > chose option Add virtual Directory Give Alias = LocalUser, Home directory path = c:\inetpub\ftproot  (same as you mentioned in default ftp site ) Now when you create a user they will be under that LocalUser virtual, don't ask me why, they said it was necessary for them to make it work.  It does work.  When you create a user its now under Default FTP Site / LocalUser / theirusername, and when they ftp in they are dropped into the isolated ftp account which is a nice touch from the way IIS6 worked before.
 

Does this mean, HC does not support MS FTP 7.x and we have to enable IIS 6 for FTP in windows 2008 server?

I'm really sorry to bump this old thread. But I'm getting this same exact problem.
 
I have manually added the Default Ftp site to my IIS with the steps above, but this did not resolve the issue.
 
Does anyone has another possible solution to fix this?