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As Jeremy said - don't click the link. Call and explain that you had an open Access Point and had a friend secure it down. Apparently your friend found out them bastards next door were using your connection, a 'I always wondered why the connection seemed slow.' It won't fool the guy on the other end but you can both officially go about your business.
I would say don't worry about it further but the ISP's are coming under more pressure to identify users. There are a couple cases going through the courts involving these issues. It doesn't look good for privacy.
First - stop sharing! They busy enough going after the providers, not the downloaders, providers are easier to track.
I hate to say it but if this is the second letter your IP/MAC have probably already been identified by MediaDefender (just taking a guess - but they seem to have all the big names as clients) so now they are probably scanning the P2P networks for your IP/MAC.
A couple recommendations:
If you can change out the network adapter you have been using. Destroy the old one.
The IP gives the address. The MAC address what are used to tie the traffic to a particular machine.
Buy a USB Ethernet/Wireless Adapter - use that when P2Ping, take it out and put it somewhere safe (hide it) when not. Without that mac address on your machine they have a harder time proving that was the machine used.
Put any incriminating files into an encrypted volume using something like TrueCrypt - if your platform allows use hidden volumes and fill the first level with porn pics, naming the hidden volume something innoculous. The porn pics alone can be used as justification for the encrypted volume.
Use an anonymous or find an open proxy server to mask your IP.
If possible keep your P2P files on external storage that you can remove and hide.
Make sure your router has logging turned off and purge your network logs on your computer. No use incriminating yourself.
or . . .
Stop using P2P - go old school with usenet.
It's all about limiting your exposure and having plausible deniability.
Doing these things is no guarantee but will significantly reduce the chances you end up facing a civil suit brought by the RIAA/MPAA. Yeah all this seems like a PITA but it's cheaper than those thugs taking everything you have.
I'm sure others have suggestions.
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