If you give a user a shell of /bin/false, this pretty much disables them from telneting. They can connect, but are instantly logged out. But if you put /bin/false into the file /etc/shells, they will still be able to use ftp. This is how I set up an ftp-only user. I then keep /bin/true out of /etc/shells, and I can set the shell to /bin/true to disable ftp as well.

Warning: if you are missing /etc/shells, the system behaves as if it exists and contains over a dozen entries. These are listed on the shells man page. Do not simply create a /etc/shells file with one line in it. You need to put in the default enties as well.