Joey,
My first reflection is :This is one reason there are licenses. What this **** is doing is what people here do when they've set-up an unlicensed guy to take a fall. If you don't have a license, you're out of luck.
Second, the most important rule in business is KNOW YOUR CUSTOMER. Here we have one prominent firm that specialises in sticking it to the new guys....and all he can get are the new guys, 'cause the veterans won't deal with him. Period. No matter how hard times are, there are some folks who you don't want to deal with.