Sounds like there's a problem with your FlashFXP installation.
Download the FlashFXP setup from our website at
https://oss.azurewebsites.net
edit...
After thought.. I'm not entirely sure but once you set the transfer mode to 'auto' via the Preferences you may need to restart for that value to take effect. I believe that's just the default value. you need to change FTP > Transfer Mode via the menu to change the current session transfer mode.