Since I know, I have not licensed my work in this manner, they are stolen. What they do is buy an original image thats small and then scan it and add the cheesy elements.
Its your rights, protect them. Tim
As you point out, you don't have to even be on the Internet for this to happen. In fact the only thing you have to do is sell your pictures and be 'famous' enough for people to find something they like. It seems like the only route to avoid this is to either be so famous that people can't get away with it, so unknown that your pictures don't get found or completely unpublished.
I've posted a blog article a while back about some of these issues
which came to the conclusion that you do your photographic prospects no good by hiding your pictures, ruining them with a copyright notice or posting them so small people can't see them.
Sorry to hear about your misfortune though..