You can definitely take legal action. Go to your local district court and file a suit. But, first talk to them and let them know that unless they return your money back, you'll sue them. They might just give you the money. Companies don't like being sued coz it damages their image and creditworthiness. So try it, and if they don't return the money back, sue them. Don't worry, you can recover your money + extra money as punitive costs. You can definitely recover all your legal fees.
I am confident coz the thing they did was illegal. it is not an excuise to say, "we didn't know." You definitely have an upper hand.