The owner of the villa we stay at uses 40Weeks to handle booking and payment. Never had a problem.

As for the problem mentioned above, I guarantee the property manager didn't want to cancel the booking from his end because VRBO dings property owners pretty hard for that. That's why he wanted the renter to cancel - it won't affect the property's all important ranking on VRBO. Sometimes booking more than a year in advance can present a problem for property managers because owners may decide to change rates for an upcoming year, which may be what happened there. In that case, the property manager has to do what the owner wants, and the owner may have decided they can probably fill the booking that far in advance at the higher rate, so they tell the manager to just cancel the booking. It sucks if you're the one who booked, but it might not have been the manager's doing at all. There's nothing VRBO can really do about it either, since they are basically just a listing agent too. The only thing VRBO can do, which I am sure they did, is lower the ranking of the property based on the cancellation.