What to do?
Don't fight back. They want to watch you get squished. So either go somewhere else (with higher level guards, perhaps?), log off for a while (to waste the other person's time), or just grin and bear it...
Write their name down or use a addon like VanasKOS to remember them, and when you're the same level make sure the guy gets a taste of his own medicine.
PvP servers enable bullies. It's not reportable, because it's part of the "PvP experience". You have to find a friend big enough to fight the bully for you, or you have to wait until you're big enough to do it yourself. That's the only advantage of a PvP server -- starting combat with other players at any time, any where, with or without consequence. If you don't like that sort of system, PvE servers allow people to flag themselves for combat if and only if they want to participate. You'd be able to avoid this problem entirely.
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