Collision problem with localScale

I am using the character controller component on my character, well I am trying to have the ability to shrink. Every frame I have it where the scale is set to Vector3(1,1,1); and when the button is pushed Vector3(.3, .3, .3). However when I start the game, he falls through the floor. What is the problem really?

 

This is a similar code I'm using.

Code (csharp):

1.  
2. function Update()
3. {
4. transform.localScale = Vector3(1,1,1);
5. if(Input.GetButton("Shrink"))
6.       transform.localScale = Vector3(.3,.3,.3);
7. }
8.  

 

Bump, I really need some help with this.

Thanks in Advance.