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These cases are generally settled for a few $thousand, on payment plans, with the stipulation that you keep the terms confidential. The vast majority I've heard of were the result of sharing files, not simply downloading. (Though by downloading you're usually automatically sharing.) While their legal tactics may be changing to downloaders I'd be surprised if that's all this was about.
I would contact attorneys in your area and mention the letter until you find someone familiar with the process. Lots of targets are poor students or further down the financial ladder than yourself.
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There are a vast number of people who are uninformed and heavily propagandized, but fundamentally decent. The propaganda that inundates them is effective when unchallenged, but much of it goes only skin deep. If they can be brought to raise questions and apply their decent instincts and basic intelligence, many people quickly escape the confines of the doctrinal system and are willing to do something to help others who are really suffering and oppressed." -Manufacturing Consent: Noam Chomsky and the Media, p. 195
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