First off: Breath. Second: Talk to a lawyer.

I panicked receiving my first C&D, but now I'm more experienced and see them less seriously.

See if your lawyer can get in contact with a human at POF to explain the situation.

Edit: Wow, I just read the letter you pasted. It even has typos. Lawyer up. This seems automated or by a lawyer in a hurry who isn't prioritizing this.