Welcome to WebmasterWorld Guest from 18.104.22.168
While I understand your frustration, there is no agency for you to report this. And it doesn't appear that they have done anything illegal, or implicitly "wrong" or "unethical".
The best you can hope for is to spread the word yourself.
If you paid them for a link and the amount you paid them is not worth it if Google won't recognize the link, then you could try asking them for your money back. If it's a free directory then why worry about it, you may still get a few referrals from them.
joined:Dec 29, 2003