Getting error "Error Message: Cannot create file" when using OS auth username with '\' (19059)

Error received when working with Toad (Schema Browser, accessing a table) after connection has been made; which continuously loops forcing user to End Task through the Task Manager.

"Error Message: Cannot create file "C:\Program Files\Quest Software\Toad for Oracle\User Files\USW\NSW2810.FLT". The
system cannot find the path specified. Note that my userid may be interfering with the path for the *.FLT file.

Steps to Replicate:
1. Launch TOAD
2. Connect as OS user abc\def123 to SomeDatabase
3. Launch Schema Browser
4. Change to production schema
5. Select table xxx_tbl
6. Error occurs here
7. Press Ok to the error message. Another error message comes up and this loops
8. Use Task Manager to kill Toad program, abc\def123@SomeDatabase

User is a local admin on the workstation and has full access to the directory path where this error is happening.

There are not problems initially creating the user and connecting with the user.
Problems come up only after working with objects in the database through Toad. There are no errors when working with SQL Plus.

User name containing "\" can be created in Toad, but has problems when an FLT file needs to be created by Toad because of the '\' and the way windows handles this.

WORKAROUND:

Recreate OS user without '\' in the user name.

STATUS:

Upgrade to version  Toad 9.0  or higher.   

The latest version of Toad for Oracle can be downloaded at the Support Portal. 
Click here.