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SEATTLE- A King County woman is taking her payday loan company to court, claiming she was, at one point, charged 1,052 percent interest and that the company is violating new restrictions on payday loan companies put into place in Washington just last year.

The suit states the Cash 1 and Retail America tried to get around the new laws by selling supermarket gift cards. The customers were then told to use prepaid debit cards, according to the filing.

Attorneys representing the woman say the companies claim that they are selling merchandise and not loans, and are therefore not subject to laws that protect consumers from exorbitant interest rates.

The woman says she bought $850 in gift cards and, to date, has paid back nearly $600.But she claims Cash 1 and Retail America told her she still owes $600 in principal and a whopping $1,520 in fees and interest. That's $2,700 to pay back an $850 transaction made less than a year ago.

The Northwest Justice Project, a non-profit, publicly funded legal teamhas taken up the woman's case.

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