Leslie Burns Copyright Extortion Letter

Copyright infringement does not require actual damages.  Statutory damages can range from $750 to $30k per work for non-willful infringement, and up to $150k for willful infringement.  That said, the cost of filing a federal lawsuit over a single image in a blog would probably exceed $30k, so taking the images down should be enough.

 Is remove the photo, which I assume you've done already, and let the other party you removed it. If this other person wants money, they will need to go to court and prove damages. Don't give them one dime. If your website did not generate money using that image, you are almost certainly in the clear. If it did, you MAY be forced to pay some restitution, though that would require the copyright owner to prove the image generated the income.

Under no circumstances should you "settle." Make the copyright owner prove damages. You might as where the figure $5500 came from. But then hang up and tell them to let you know when the court date is. There's an excellent chance you'll never hear from them again.