IIS FTP: Client can't access the folder

Hello,

I have Win2K server running IIS FTP. I made a group that can access the directory and only users belong to that group and administrators group are allowed to access (full access).

Directory:
C:/FTPRoot/Group1

Users in Group1
ID1: user1
ID2: user2

NTFS permissions:
Administrators : Full access
Group1: Full access

Problem scenario:
User1 logs in to the FTP server and create a folder called TEMP. User1 then upload a folder called BUSINESS under the TEMP folder. Folder TEMP has files - FILE1, FILE2. User 1 logs off.
<< Folder / file permissions at this point >>
C:/FTPRoot/Group1
Administrators : Full access
Group1: Full access
C:/FTPRoot/Group1/TEMP
System: No access
Administrators: No access
C:/FTPRoot/Group1/BUSINESS
System: No access
Administrators: No access
C:/FTPRoot/Group1/BUSINESS/FILE1
System: Full access
Administrators: Full access
C:/FTPRoot/Group1/BUSINESS/FILE2
System: Full access
Administrators: Full access
<< end of permission information>>

User2 then logs in and tries to access the FILE1. User2 can see the BUSINESS folder but User2 can't access the files under that folder.

What is causing this problem???

Thanks in advance,

Nick

I don't use the IIS FTP. www.iisfaq.com is one place that might have more assistance with ftp stuff, or maybe someone else here will jump in.