I actually feel sorry for the OP.
If she is scared of dogs and doesn't have one herself, then she shouldn't have to be leapt upon by someone else's dog.
The owners' response was out of order. Instead of laughing, they should have retrieved their dog, and seeing that OP was upset and crying, could have explained to her that their dog was just boisterous and friendly (if that was the case) and put her mind at rest.
After that first time, they should have made sure that their dog can't run off like that again. What if it knocked over an old person, or pushed a pram over?
I've got a couple of dogs myself, so I'm not anti-dogs or anti-dog owners at all - but if you don't own a dog, you shouldn't be inconvenienced by anyone else's.
What I would do, OP, even though the neighbours don't deserve it, is to pop around with a dog treat, and ask them nicely if they can make sure that the dog doesn't leap on you again, as you have a big fear of dogs and its making you very nervous. If they can't accept your gesture (with treat for their precous dog), and it happens again, I'd look into who you can report it to.