If you are using SSH version 1, this is a known problem. If you want, try the beta version here:
http://www.celestialsoftware.net/telnet/AbsoluteTelnetBeta.exe
This has been discussed in the beta newsgroup, and I'm in the process of quickly finalizing the new beta of 3.13 in order to get it into production to replace 3.11. Join the beta group to keep on top of updates. Read the last few messages to get an overview of the problem:
http://www.celestialsoftware.net/telnet/beta_software.html