I'm sorry for your troubles. But why do you think it's WinSCP that deleted the files? I cannot imagine that. Do you have any logs?

Wasn't the previous problems (not listing the folder, hanging of the connection) actually an indication that the server had issues already before?

Working on a clients site today the public_html directory wouldn't list. I tried double clicking another folder and WinSCP hanged. I have to use task manager to close the software.

I logged back in the the entire pubid_html folder was empty. My client is beyond livid. I didn't even get a check to take a backup before WinSCP emptied the folder!?!?

How the hell can this happen!