In Scandinavia, most people's computers use UTF-8. But older computer systems use ISO-8859-1. All the letters are in that encoding as well, and we used it before Unicode became common. There is nothing special about Scandinavia in this regard. For example German, French and Spanish all have a few extra letters. If you search on the problem, you'll get more answers if you use any of these languages.
I don't know much about proftp, but I searched it and found this page:
As I understand it, if you use "UseEncoding on", you deny the FTP client the possibility to change it. If the client then sends them as ISO-8859-1, the result is incorrect UTF-8, which might the the problem.
I would try to not use "UseEncoding" at all. In the docs, its says "By default, the mod_lang will automatically discover the local character set, and will use UTF8 for the client character set. The module will also allow the use of UTF8 encoding to be changed by clients using the OPTS UTF8 command (as per RFC2640)".