Selection Tool's Functionality of Changing the Size of Object (Scaling it) - Gone

help!

My selection tool seems to have lost the funcionality of freeform scaling (ie. when I postion the coursor on the corner of an object and pull/ drag it to make it bigger (or smaller) - it no longer works!)
I am now only able to select and move the object, but forget about using Selection Tool to change object's size, which was a superhandy option (I'm now having to restore to either adjusting with direct selection tool anchor point by anchor point or using Transform > Scale - both much less handy and much more time consuming...)

I might have accidentaly and unknowigly changed a preference/ adjusted a setting, but don't know how to bring it back - please help!