That's a "classic" response to trying to log into the shell when you are not a "shell" user. Unless you have "shell access enabled", you won't be able to get in.
What you are seeing happen is that your ftp only user is connecting, and going through the authentication process, then being immediately "dumped" because that user is not authorized shell access.
You can determine whether or not a given user is authorized shell access by visiting the link above. Get that sorted, and wait for it to "take", usually in about 20 minutes or so (though it could be longer), and try again..you should be fine.