I'm no lawyer but there are so many things wrong with this.
It starts with "Cease and desist" but it is not just a cease and desist, they are also demanding money. But i also don't see any sort of summons or court order so legal action hasn't really been taken yet? You can't just write to people demanding money for services you didn't want, as far as i know. In my opinion they are just chancing it. It doesn't look like the proper procedure to me at all.