Pay Day Loan threats HELP!!!!!

Sooo.... I took out a payday loan with Peak 3 loans. They are big time loan sharks but I needed the money, so I had to do what I had to do. The initial loan that I took out with them was for $100, with a 700% interest rate. I paid the "refinancing fees" for several months until I payed off the principle and everything was paid off. Then I took out another loan a couple of months later, I paid the "fees" again for about another 5 or 6 months, paying a total of around 320- $400 on a $100 loan. I then switched from my bank to a mastercard debit card and didn't give Peak 3 my info, so as soon as they saw that my work checks weren't being direct deposited into my checking account they started bombarding my checking account , racking up fees, which I did initially pay, but as soon as I would pay off the return fees they would just bombard my account again, making it impossible to keep up. Well my bank account was closed and that was all I had really heard from Peak 3, with the exception of a spam mail saying my account had been sent into collections. Then one day I get a call from a process server saying that they "tried serving me at my work" and their client was pressing criminal check fraud charges against me. So I called the debt collector holding the debt and agreed to a payment plan because I was terrified of being in trouble with the law, I have never so much as been arrested. I made a good faith payment of $100 of the supposed $400 I owe. But as I was looking online, I went on the Massachusetts.gov website, then called the Office of Consumer Affairs banking division, after finding out that Peak 3 was not authorized to operate in MA, I also found out that payday loan companies aren't allowed to charge more the 23% interest in MA, so when I told the state official about the %700 interest she said the loan was "very illegal" and I only had to pay the principal plus 23% interest. When I called the collection company the supervisor I spoke with berated me with insults, calling me a criminal, asking how I can sleep at night, saying I am thief that stole money and that it didn't matter what the rules were in MA because the company was not based there, although neither the collection agency, nor Peak 3 would tell me what state they operated in, only saying they were an "online" company and operated everywhere. I am not so concerned about the loan itself, because I know I have a case with it being illegal what I am wondering about is the so called "check fraud".

1. They say the check fraud stems from the fact that my checking account was collateral for my debt, (on the loan documents it says the debt is unsecured therefore there is no collateral) and that the insufficient funds were sent across state lines. I pointed out that MA would not prosecute me for this due to it being illegal, at the assurance of state regulators, they then said that they would charge me in the state that the company is based in. The have made no attempts prior of threatening to criminally prosecute me to collect this money, and as soon as I became aware of this I made a good faith payment as well as a payment arrangement, after paying on time, every time on my loans with them for almost a year. Do they have any case for fraud, and should I just pay the full amount or should I file a complaint with the state and have them asses whether I should pay any fees at all.

Any help is appreciated, Thanks.......