Sounds pretty typical of a first encounter with the Fiverr CS collective.

If you are a new seller on Fiverr, I would personally advise not chasing levels. Your experience with the unfair cancellation penalty system is nothing new and it’s driving even a lot of long-tern Fiverr sellers insane.
Basically, as the system stands:
- You could have perfect ratings, reach level 2 or TRS and suddenly get demoted for 1 -10 cancellations or chargebacks, regardless of your reviews or quality of service
- Some sellers experience sudden drops in sales volumes after a demotion. In this case, chargebacks and orders placed in error by buyers, can see you go from zero to hero to zero again and make earnings very unpredictable
- You need to ask yourself whether with all the above being the case, you want to focus on chasing levels or diversifying off-Fiverr, in order to lower the risk of becoming financially dependent
There is chatter about a potential upcoming change to the way Fiverr handles cancellations. In reality, however, these rumors have been circulating since November 2017 and so far nothing has materialized.
This is an awful situation to be in. I have been in it myself and have been demoted (like many other sellers) for the same reason. All I can suggest is that you keep a hawk eye out now for your old buyer coming back with a new username and trying to pull the same scam over.