Counsel of perfection: Get it in writing if you can. Depending on how brave you feel get a friend to go with you to the shop as witness. If you don't leave the shop they have the alternative of trying to make you (assault with a witness, preferably with camera phone) or calling the Police - when you can explain what you wanted to know and they should be in trouble.

Illegal. Full Stop.

Technically you could sue, might have some problem getting legal aid, might find a pro bono but it's very small fish.

Reality checkpoint: Talk to the CAB. I'd also shop them to the local papers , but watch that they don't put some nasty racist spin on it, I assume you wouldn't want to be associated with that.


ETA: try the Equality and Human Rights Commission: http://www.equalityhumanrights.com/