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Hello, my name is ***** ***** I am a qualified lawyer happy to help you today.
What are they alleging and asking for? Do you need to notify your insurers?
Thanks, ***** ***** her a refund which is her legal remedy in all of this (nothing more).
She is clearly blackmailing you and your business and threatening to make defamatory and damaging comments on social media. Anything she says which is untrue can be libellous - you could sue if it means a drop in trade for your business. At the extreme end of the dispute you could apply for an injunction against her to stop her from doing any more damage.
The norm is to send her a cease and desist message (and an undertaking to remove any defamatory comments/to refrain from making any more defamatory comments, and if you have actually incurred a loss, to ask for her proposals for compensation).
You could go as far as reporting her to the Police for blackmail (on the 101 number).
Does all the above make sense?
Not at all, you can use part of her name and it is not a breach of the new data protection law (GDPR) - you also have a defence to retain her details in case you need to involve the court in any of this.
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Pleasure, re the cease and desist letter - you can download one at http://www.lawdepot.co.uk but to be fair all you need to do is identify your email or letter as a "cease and desist" communication, that you will take legal action unless she stops defaming your business, that she has been reimbursed and that you have not breached GDPR (you have not used her full name), and she has not requested erasure of her details either.
Have a good evening.