[Scenario]

Y_Less, you're right and I have no objection to them having a home directory. However, it seems that when they have a home directory, they either cannot stray from that directory (meaning if they have chown permissions on other files outside of their directory, they cannot see them), or they have full rights to all of the files/folders in their home directory.

So, the new question is: How do I give them a home directory, but also let them stray from that directory if they have chown permissions on files/folders outside of their home directory..?

And, this is FTP we're talking about. They don't have SSH access or anything.