The only problem with using /etc/hosts.allow and deny is that it is host specific (bound to an ip address or subnet) and not user specific. This approach will work, but will allow any user to telnet into the box if they are at the right host and will not let the proper users be mobile (which I would imagine is half the purpose of telnet). Are you trying to deny hosts or users? /bin/false is just another way of saying: this user has no valid shell at all, which may be why ftp is no longer working for those users. Actually I'm not sure if ftp users need a valid shell or not. Question: can your users log in anonymously, or do you need more security than that? Also, find out if ftp users need a valid shell. If not, /bin/false is the way to go. If so, I'm scrathcing my head on this one too.