[sassan]

Well you seem to have your question answered.
I was going to add, as Long as somebody finds your work extra-ordinary and wants to reward you for that you may as well enjoy the it as appropriate but like always here the key word is "And. although we must charge a nominal fee for this service,..." that change the whole concept.
I am surprise as to how commonly people fall for this and these smarty pants drain money out of Innocent people.
I would probably write a certified letter back to them, informing them that the work is copy righted and owner did not entered it for any contest etc and unauthorized publication could be legally followed as copyright infringement or as needed.
Your work was an excellent one and no one even for free should not publish it for their own benefit unless first you have given your implied consent.