Do you have access to view the logs on the SFTP server? If so, you may want to enable Verbose logging there and then turn on Debugging mode for VisualCron as well. Try the connection, and then turn debugging/verbose logging back off. The logs on both systems may indicate something that could be adjusted to remedy the issue.
There were a few other threads also about the "type 16" error, and so far they also were still being successful, but were still getting the error nonetheless. Logs will help us greatly.