your risk is low (Score 2, Informative)

while the other side doesn't need to register the mark on a state or federal level in order to have certain rights, the damages the other side can seek if the mark is not registered are limited. In addition, as others have commented, given the services offered at the competing sight, namely advertising for others, the domain is likely a very weak mark that would receive only limited protection, if any at all. If I had a client with this issue and the facts presented, I'd advise them not to worry about or respond and determine a course of action if the situation develops further. If they keep harassing you, you might consider filing a small-claims court action against them for mental anguish or any other action your local laws support. Although the ability to collect on any judgment awarded is likely suspect, there may be intangible benefits to such a suit.