Disputing VIP Loan Shop

I took out a loan from the VIP Loan Shop. I was paying the fee of $90 every two weeks and then I lost my job. That's when I found this site and found out that Payday Lenders are illegal in my state of North Carolina. I borrowed $300 and paid back $450.

Thanks to this site, I found a standard letter that I customized and emailed to them. In it, I said that they were illegal in North Carolina and that since I had paied $450, I had satisfied the principal and then some.

I need to know how I should respond to the following email they sent to me eariler today.

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[FONT=Arial][SIZE=3]I respect a consumer who researches the services to which he/she uses. With that being said when you applied for and agreed to the terms of the loan it would have behooved you to read the complete contract you were agreeing to. You are a citizen of the state of [COLOR=navy]North Carolina[/COLOR]; however the contract was not made in the state of[COLOR=navy] North Carolina[/COLOR]. The contract was completed via the World Wide Web; the governing law (clearly outlined in your contract) which you agreed to by your legal e-signature is based in the isle and providence of Nevis West Indies Bahamas. [/SIZE][/FONT]

[FONT=Arial][SIZE=2][FONT=Arial]With all the information at hand I am still willing to work out arrangements for the balance that is still owed on your account. You may contact our offices 8am-5pm CST Monday-Friday. Our toll free phone # is 1-866-321-6114[COLOR=navy] option 4[/COLOR]. You must contact our Collections Department as soon as possible. If no contact is made within a reasonable time the account will be sent to a third party collection agency. [/FONT][/SIZE][/FONT]

[FONT=Arial][SIZE=2]If you have any questions do not hesitate to call or email.[/SIZE][/FONT]

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Thanks for your help!