> To note - my mom found out about this site when she received a note telling her she needs to pay close to a $1000 to license the photo that was ripped off from her site.

To me this is smells like the real motive behind this. It's not about trashing your SEO, or stealing traffic, but rather to scare those small website owners into paying some kind of 'fee'.

It's pretty safe to assume lots of small websites for local businesses use various photos they found online or downloaded from Google images, rather than their own content or images they bothered paying license for. Copying those images onto a seemingly legitimate site and then filing a claim for license payment seems like a pretty good strategy to milk money out of innocent site owners.

I'd be curious to see the note your mum received and what kind of language or tactics it's using.